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OU_1 60738 
















Baker. Ph.B. 













Colonial Administration 









All rights reserved 


Set up and electrotyped. Published September. 1905 
Reprinted July. 1912 

Syracu8e\ New York. 


In offering this comparative study of the meth- 
ods of colonial administration the author is fully 
aware th^t the time is not ripe for a complete and 
conclusive statement of the principles involved. 
Many of the experiments dealt with are of so re- 
cent an origin that their outcome is still entirely 
problematical ; in fact, it may be said that the en- 
tire policy of governing distant and alien depend- 
encies is still on trial. The purpose of this vol- 
ume is to furnish a statement of the various prob- 
lems confronting colonial governments; and to 
indicate the main lines of solution that have been 
attempted ; selecting from the vast amount of 
available material the most striking illustrations. 
It intends to give a survey of the varied activities 
of colonial governments, the institutional frame- 
work of which has been outlined in an earlier 
book in this series. 

A part of the first chapter of the book was read 
by the author at the International Congresls of 
Arts and Sciences at St. Louis, and a part of the 
second chapter has been published in the Amer- 
ican Journal of Sociology. The author desires 
to express his obligation to Mr. J. W. Gannaway, 
and to Mr. Horatio B. Hawkins, students at the 
Universitv of Wisconsin, for valuable assistance 
ation and proof reading. 

MADISON, March I, 1905. 












VIII. THE LAND POLICY . . . . 314 




Egyptian pound sterling (E) $4-94,3 

French franc 19,3 

German mark 23,8 

Indian rupee R (R x = 10 rupees) 32.4 

Dutch florin 40,2 

Japanese yen 49,8 

Mexican dollar (fluctuating) 44,3 


N. A. R. North American Review 

Pol. Sc. Qu. Political Science Quarterly 

Q. D. C. Questions Diplomatiques et Coloniales 

R. P. et P. Revue Politique et Parlementaire 

R. d. D. M. Revue des Deux Mondes 

Ann. Am. Ac. Annals of the American Academy 

B. z. K. Beitrage zur Kolonialpolitik 

Inst. Col. Int. Institut Colonial International 

Ann. d. Sc. Pol. Annales des Sciences Politiques 

Proc. R. C. Inst. Proceedings, Royal Colonial Institute 

EC. J. Economic Journal 





Future students of political evolution will note 
a strange similarity between the theories which 
are now being advanced to defend imperialistic 
expansion and that humanitarian optimism which 
animated the period of the .French Revolution. 
The ideas through which the French Revolution 
attempted to conquer the world were based upon 
an intense and undoubting belief in the equality 
and uniform virtue of human nature. Freed 
from the shackles which perverted forms of so- 
ciety had forged, humanity would again be true 
to itself, would follow its rational impulses, and 
under sane institutions, inherit a millennium of 
peace and happiness. These hopes of a young 
century were bitterly disappointed in its later 
years. It became impossible to realize the unity 
of civilized mankind, and the narrower feelings 
of nationalism and race antipathy completely 
overbore the earlier enthusiasms. But at pres- 
ent, when a new and universal forward movement 
of civilized society is taking place, the same ideals 
are again appealed to. Humanity is one, and 
those members of the brotherhood who, through 
barbarous customs and irrational institutions, are 


kept in a state of backwardness are to be led out 
into the light of freedom and reason and endowed 
with the multiform blessings of civilization. 
Many of the races embraced in this ideal love are 
as little inclined to accept the dispensations of a 
human providence as were the European nations 
who resisted the spread of revolutionary ideas as 
interpreted by Napoleon. Their resistance may, 
however, turn out to be less formidable, and so 
the course of history may not repeat itself. The 
experiment may be more successful this time than 
it was before, and a new era may actually be 
dawning upon the outlying regions of the world. 
But if this forecast is to come true, it will be 
due primarily not to the general ideas to which 
we have just referred, but to certain great eco- 
nomic changes which have taken place during the 
last century and which have laid a material foun- 
dation for a world-wide organization of social 
life. The movement began a few centuries ago 
with the creation of commercial stations along 
the coasts of Asia, Africa, and the Eastern Archi- 
pelago. The basis of intercourse was then 
frankly commercial. There was no attempt to 
interfere with the interior social and political ar- 
rangements of the native races, and only in India, 
where the British were spurred onward in the 
course of empire by the ambitions of the French 
conquerors, and in the Dutch possessions and 
other plantation colonies, which were looked 
upon as estates waiting exploitation, was there 
any penetration of the interior regions. But 



after the middle of the last century, the great ad- 
vance made in the rapidity and ease of communi- 
cation revolutionized the entire movement of co- 
lonial activity. Being brought so much nearer to 
the European countries, the undeveloped regions 
in general came to be looked upon as promising 
fields for the investment of capital in the extrac- 
tive and agricultural industries. This implied a 
far different relation to internal affairs than had 
obtained before. While the merchant had been 
satisfied with small trading stations or river 
hulks, the colonial entrepreneur looked to the in- 
terior regions for an investment of his capital. It 
was essential to him that these regions should 
be made accessible and that within them law and 
orderly conditions should be established, that a 
steady labor supply should be provided, and that 
as far as possible the mechanism of western in- 
dustrial life should be introduced. The inevit- 
able result of such changes was the demand for 
political sovereignty over extensive tracts of ter- 
ritory. The struggle for colonial possessions 
commenced, and with great rapidity Africa was 
divided among the colonizing nations while pre- 
emption rights were claimed in other unoccupied 
regions. Having thus forcibly seized upon large 
tracts of land and established a claim of sover- 
eignty over their inhabitants, the nations engaged 
in this movement looked for some moral principle 
upon which this procedure could be defended. 
At this juncture it was very natural to fall back 
upon the earlier theories of the unity of mankind 



and of the destiny of rational civilization to em- 
brace the entire globe. The missionary spirit 
was evoked, the duties of the civilized nations 
towards the less fortunate were unfolded, and the 
whole movement was represented as one of altru- 
ism and benevolence. 

This intermixture of economic forces and ideal- 
istic moral impulses has brought great confusion 
into the entire political thought of our period. 
So chaotic is its condition that many minds have 
despaired of discovering in the entire movement 
of expansion any vestige of the moral sense. 
They are ready to stamp the entire idealistic 
theory as pure cant, consciously designed to veil 
a most selfish type of aggression. They point 
out that while we preach the doctrine of universal 
brotherly love, we look with disdain upon na- 
tions, no matter how highly civilized, who differ 
from^us in the least shade of color; we abolish 
slavery, and under the pretext of providing a 
moral education for the natives, introduce forced 
labor; we preach peace while we are stirring up 
into warlike feelings societies that for ages have 
lived in a condition of peacefulness ; we cry for 
the open door, meanwhile plotting all the time to 
reserve to ourselves the markets over which we 
can exercise any control; and while our science 
has made the idea of evolution an ingrained part 
of our being, we carve up the world into artificial 
tracts and attempt to impose upon the natives an 
alien system of social institutions. Such contra- 
dictions invite the suspicion that we have here to 



do with a vast aggressive movement of national 
selfishness, which is simply paying a bare and 
empty respect to ideas of morality that in prac- 
tice are totally disregarded. And yet such a con- 
clusion would hardly be just. In the complex 
system of thought which directs the action of our 
time, the enthusiasm for the ends and purposes 
of civilization is more than a mere veil of selfish- 
ness; but it remains to be determined how this 
idea can have any effectual influence in the con- 
structive work of colonial administration. 

Like strong personalities, the modern nations 
are filled with a desire to impress the mark of 
their genius upon the world. While there are 
many ways in which this may be done, one of the 
most obvious is that of gaining followers for their 
ideas of life and civilization. Nations desire 
wealth, and expand their trade ; they desire prow- 
ess, they create great industries and maintain 
powerful navies and armies; but in their heart 
of hearts there can be no truer gratification than 
that of hearing their language spoken in a strange 
land, than having their customs and institutions 
acknowledged as superior by other races. This 
leads to the conception surely not ignoble that 
the area of civilization is expanding and that by 
the patient efforts of centuries one nation after 
another will be raised to a higher level of social 
efficiency and allowed a greater share of social 
happiness. As from the small altar of civiliza- 
tion in Greece, the torches were carried to the 
east and west, even by the armies of Alexander 



and Caesar, the imperialists hope that this same 
heritage, enriched by the achievements of many 
intervening centuries, will henceforth be spread 
throughout the globe by the peaceful means of 
economic development, supported only when ab- 
solutely necessary by the arm of force. 

But \v? have already seen how unsafe a guide 
an ideological conception like this will ever be. 
In order that it should become useful, we must 
avoid the danger of a vagueness which would in- 
clude all manifestations of expansive energy 
under its mantle of approval. We must analyze 
the forces at work in order to determine which of 
them are really in accordance with the aims and 
the character of civilization. We must inquire 
what our civilization demands, and what con- 
structive elements in a colonial policy may be 
judged to flow from its character and essence. 
Our own civilization is the only criterion we can 
apply, because, while we may despair of being 
able to bestow its outward blessings upon alien 
races, we must in our relations with them be gov- 
erned by the inherent laws of our own rational na- 
ture. An attempt to act otherwise would imply 
a claim to the wisdom of Providence in ordering 
the destinies of alien races. But we are on safer 
grounds when we conclude that we are entitled to 
do what is natural to our own civilization and 
what its character demands, and as long as we do 
not depart from its principles in our intercourse 
with other races, we shall not have to reproach 



ourselves, at any rate, with having deserted the 
only clear guide we have. 

Colonial expansion must first be judged from 
the point of view of the needs of our own civiliza- 
tion. To what extent is it a normal result of those 
forces which constitute the civilization of the 
West? The conception that the whole move- 
ment is undertaken in an unselfish spirit in order 
to help the less fortunate races cannot be seriously 
considered. Nations that have so many unsolved 
problems at home would be stultifying themselves 
by trying to straighten out the difficulties of oth- 
ers. Unless a vital need of our own civilization 
for this very expansion and interference with 
other races can be shown, it cannot claim any jus- 
tification on humanitarian grounds, because we 
have no way of proving that our political inter- 
ference with others will be necessarily beneficial 
to them. When we inquire what are the truly es- 
sential characteristics of our civilization which 
distinguish it from all others, we will perhaps find 
in the last analysis that they are mobility, concen- 
tration, and mastery over the forces of nature. 
In no other society are the individual members so 
independent, so able to move within the social 
body, to determine their own development, and to 
bring their energies to bear in a variety of places 
and manners. No other society has so high a 
concentration of individual forces for social ends. 
No other society has achieved so complete a mas- 
tery over the productive and impellent powers of 
nature. Out of these characteristics the expan- 



sion movement has naturally developed. It was 
impossible to restrict the mobility of social forces 
to national boundaries. Passing beyond, they 
for a time escaped social control, and the action 
of the individual adventurers by no means always 
redounded to the credit of civilization. It was 
found necessary to follow them up and to bring 
social conscience and control to bear upon them 
in the new regions which they had penetrated. 
The principle of concentration naturally led to 
the demand that the new regions whose resources 
were being opened up, should be brought into 
close relations with the national industrial life 
to which they are subsidiary. Finally, the great 
problems of the control and utilization of the vast 
productive forces of the new continents invited 
the ability trained in the narrower European field 
to prove its mettle in coping with greater diffi- 

It has been urged that since the characteristic 
mark of modern economic life is the intensiveness 
of its methods, the attempt to spread economic 
effort over larger areas would probably mean 
the return to the barbarian system of exploita- 
tion. According to this view we have to 
choose between the constantly more productive 
intensive culture of a smaller territory and the 
extensive exploitation of ever widening areas. A 
real danger is here pointed out. If on account of 
the rapid and easy profits gained through a reck- 
less exploitation of the natural wealth of new re- 
gions, our capital should neglect the steady inten- 



sive improvement of industry at home, a marked 
retrogression would be sure to set in. Our in- 
dustrial supremacy would be threatened and our 
social life corrupted, on the one hand by a degen- 
eration of industries at home, on the other hand, 
by a wealth too easily gained and by the conse- 
quent rigid stratification of society. The lesson 
to be drawn from this objection, therefore, is that 
by all means reckless exploitation in the new 
countries is to be made impossible, not only in 
order to protect the inhabitants of these regions, 
but also to prevent a very dangerous reaction 
upon our own industrial and social life. But if a 
sane and rational policy of economic development 
should be followed, it is difficult to see why it is 
not justifiable to extend intensive methods to 
wider areas, and to introduce a productive econ- 
omy into regions where at the present time bar- 
barian exploitation holds undisputed sway. 

It has also been urged that the present move- 
ment only emphasizes the nervous restlessness 
of western civilization. We have given, it is 
said, too much attention to means, too little to 
the ends of life, and in the great movement that 
we are now undertaking, we are striving simply 
for new means, we are erecting a vast mechanism 
which will embrace the entire world and crush it 
into dreary uniformity. What result are we aim- 
ing at in the construction of this vast machine? 
Who is to be happier for it? How can it conceiv- 
ably increase our happiness or the happiness of 
the native populations who are turned from their 



natural mode of existence, and forced to adopt a 
new and irksome way of life? Questions like this 
are too general in their reach to admit of a con- 
clusive answer. We may grant that our civiliza- 
tion is lacking in definiteness of aim, that its gen- 
eral tendencies are confused and uncertain, but 
may it not be that in the contact with the older 
civilizations of the Orient, it will be led to a new 
interpretation of life? Such would seem to be 
the natural outcome. When once the world has 
been organized as a system of civilized states and 
future expansion becomes impossible, we shall of 
necessity have to seek satisfaction in static rather 
than in dynamic ideals. 

In contemporary thought the idea is often ex- 
pressed, or at least suggested, that our civiliza- 
tion is to be the ruling force in the future, in this 
sense, that all other civilizations are to be sub- 
servient to it, and that the Western races are to 
form a privileged caste. A conception such as 
this is untrue to the fundamental characteristics 
of our civilization. A return to the caste system, 
even with our race as the ruling order, would be 
a denial of the essential principle of social mobil- 
ity. The wealth that would be drawn from the 
subject territories under a system of this kind, 
would inevitably lead to national degeneracy. 
The social and political attitude thus introduced 
would have a most pernicious reflex influence 
upon the internal institutions of the Western na- 
tions. As they are not so constituted as to form 
in themselves a compact caste, the result would 



be that an inflexible social stratification would be 
developed within them, and the laboring classes 
reduced again to a position of virtual serfdom. 
It is due therefore to the very ideals which con- 
stitute our superiority and secure our welfare 
that we should allow to the territories which 
come under the control of the Western nations 
the same freedom of economic development which 
has rendered the latter powerful and prosperous. 
The movement which we are considering car- 
ries with it the danger of a revival of actual sla- 
very. As the former stages of evolution which 
our civilization has passed through began with 
the existence of a large slave population in the 
ancient cities and in the societies of mediaeval 
Europe so there is now, with the entry upon 
that phase in which the whole world will consti- 
tute a unified economic organism, an unavowed 
but powerful tendency to reduce a large part of 
mankind to a position of servitude. The belief 
in the perfectibility and ultimate unity of the hu- 
man race is largely formal and present inferiority 
is, treated as necessarily permanent. With the 
economic development of the new regions that are 
now coming under European control there is cre- 
ated a great demand for unskilled labor, far 
greater than the slight inclination of the black 
races to work prompts them to fill. It is not sur- 
prising, therefore, that the introduction of a sys- 
tem of compulsory labor is advocated. The dig- 
nity of labor is to be taught the natives by force, 
and methods which we have been accustomed to 



consider among the worst abuses of slavery are 
freely advocated as the only means of endowing 
the backward races with the progressive spirit of 
industry. Should this tendency continue to gain 
strength, it is clear that the world will have to 
fight the anti-slavery struggle over again from 
the beginning, but on a far wider area and involv- 
ing far more powerful interests than the recent 
national anti-slavery crusade which we had con- 
sidered as the final word in this matter. 

We have thus far looked at the movement of 
expansion from the point of view of the interests 
of our own civilization. We now approach the 
far more difficult question as to what is to be our 
attitude towards the civilizations and social sys- 
tems which we meet and with which we have to 
deal in colonial administration. At first sight, it 
would seem an eminently proper policy to favor 
the introduction of our own institutions among 
all the populations that come under our control. 
Every nation considers its own institutions as the 
highest products of social evolution, and no bet- 
ter destiny could be conceived for other races than 
that they should be allowed to share in the bene- 
fits which rational laws would bestow upon them. 
Moreover, it is exceedingly difficult to understand 
alien social systems and to judge correctly the 
trend of their evolution. It would indeed require 
the wisdom of a Platonic philosopher to forecast 
properly the spontaneous development of such 
societies. With our own institutions we are fa- 
miliar. Their virtues we believe in, They seem 


simple and rational, we can easily put them in the 
form of legal enactments and thus bestow them 
upon our dependents as a complete and satisfying 
whole. Moreover, the general desire to set the 
impress of our national genius upon the world, 
finds no better expression than this propaganda 
of institutions. In fact, to many people the en- 
tire justification of the expansion movement lies 
in the promised spread of better institutions, of 
the European or American type. When we there- 
fore ask ourselves the question, which is the bet- 
ter policy, not to interfere with native customs 
and civilizations, in fact to foster their natural de- 
velopment, or to sweep away the customs of 
backward races which so often seem but the bonds 
which hold them in slavery, and to put in their 
stead the liberal institutions of our own society, 
the answer is most readily given in favor of the 
latter alternative. 

And yet the policy of assimilation has thus far 
in practice proved unsuccessful and at times even 
disastrous. Experience seems to show that even 
those institutions which are by us considered the 
very foundation of good government may have 
harmful results when introduced into another so- 
ciety. The most striking example of this is found 
in the experience of Great Britain in India. The 
English are not an assimilating race. They have 
always had clearly in mind the economic purposes 
of expansion, and have allowed the political mis- 
sionary spirit comparatively little sway. They 
have not been filled with the desire of transform- 



ing native societies. Still they have introduced 
certain institutional reforms, which to them 
seemed absolutely essential and not attended with 
any risk. Thus, who would not agree that the 
impartial enforcement of contracts, the system of 
judicial appeals, representative government, the 
institution of the jury system, a free press, and 
liberal education, are things about the usefulness 
of which among us there can be no two opinions. 
The British introduced these institutions into 
India, with the best of intentions, and yet with 
such results that their opponents can now plaus- 
ibly argue that they must have been animated 
with the sinister purpose of disrupting and under- 
mining Indian society. The most unforeseen 
consequences have resulted. Through the rigid 
enforcement of contract the vast agricultural 
debtor class has been gradually enslaved to the 
money lenders and is being ousted from its an- 
cestral holdings. As the government upholds the 
principle of freedom of contract and will not fix 
the price of grain in times of shortage, the calcu- 
lating native capitalist is enabled to hold his stock 
of food for higher prices regardless of the fact 
that people may be dying of famine by the thou- 
sand in the neighborhood. The scientific system 
of appeals favors the machinations of unscrupu- 
lous native pleaders, who gain a livelihood by 
stirring up litigation and making the most of ju- 
dicial delays, with the result that the confidence 
of the Indian population in the justice and effi- 
ciency of the law has been impaired. The grant- 



ing of representative government in municipali- 
ties has led to the sharp accentuation of religious 
and racial animosities and has especially increased 
the bitter feeling between Mohammedans and 
Hindus, the former of whom oppose strongly any 
system of representation based upon numbers. 
The same result has been brought about by the 
creation of a free press, which uses its freedom 
not only for the purpose of constant agitation 
against the British, but also to stir up and per- 
petuate the feeling of mutual hatred between the 
various great religions of India. The jury sys- 
tem has undermined the confidence of the natives 
in the justice of the British, because no white jury 
can be found to condemn a white man for the 
murder of a native. And finally, the system of 
higher literary education conceived by Lord 
Macaulay for the purpose of initiating the Ori- 
ental mind into the philosophy and literature of 
the West, has resulted in the destruction of native 
morale among the educated classes, and in the 
creation of a literary proletariate, hungry for pub- 
lic employment. The complete bearing of these 
social changes deserves more careful study than 
we can here give it, but the above brief indication 
may suffice to point out how incalculable are the 
results of the importation of foreign institutions 
into a native society. 

France is the classical land of assimilation. 
The colonies that were left to France after the 
Napoleonic era were few and small. A certain 
romantic and sentimental interest attached to 


Martinique and Guadeloupe, and they became the 
spoiled children among the colonies. Most of the 
institutions of the mother country were extended 
to them. When in the middle of the last century 
the colonial empire of France again expanded, 
through the acquisition of territory in Africa and 
Asia, the older principles of action were not aban- 
doned. The new territories were treated as re- 
gions within which French civilization was to be 
forthwith established. The most radical belief 
in constructive meliorism still governed French 
political thought. The results of this policy are 
now before our eyes. Algeria has long been 
treated as a part of France. The attempt has 
been made to give the natives a personal status, 
to destroy the family and the tribe, to break up 
the communal land holdings, to apply to the for- 
ests the stringent regulations of the French for- 
est laws ; with the result that to-day the natives 
look upon the French as their arch enemies, bent 
upon destroying their social life and utterly ruin- 
ing them. It is in the matter of individualism 
that the assimilating policy is apt to make its 
most radical attempts at reform. The grouping 
of populations in families and tribes is looked 
upon as a mark of barbarism, and it is regarded as 
the first principle of a liberating policy to recog- 
nize the right of the individual fully to control 
his property. While this is apparently a liberal- 
izing movement, its results in fact are usually far 
from those aimed at. Not prepared by gradual 
social evolution for the individual status, the na- 



certain willingness to acknowledge the justifica- 
tion of divergent social institutions. But the es- 
sential character of French colonial policy is still 
assimilative in the main, although a greater wil- 
lingness is shown to make concessions to the nat- 
ural obstacles opposed to such a policy. 

The policy of assimilation rests upon the old 
rationalist doctrine of the universality of human 
reason. An institution once declared rational 
must as such be applicable at all times and in all 
places; and though individuals may at first, in 
the darkness of superstition, resist the introduc- 
tion of such institutions, they will, if forced to ac- 
cept them, be ultimately liberated thereby and 
raised to a higher plane of existence and civiliza- 
tion. The essential element in this belief is that 
reason is the one controlling force in human con- 
duct, and that rational institutions are productive 
of rational action and hence are the sole require- 
ment for well-ordered and civilized life. As a 
matter of fact, however, the science of the nine- 
teenth century has abandoned this belief in the 
universal supremacy of the conscious rational 
faculty. Men are governed far more by their in- 
herited beliefs, customs, and instincts, than by a 
conscious choice between different courses of ac- 
tion. This is true among ourselves, and it is so 
to an exceedingly greater extent among all ab- 
original peoples. The doctrine of assimilation 
makes a demand upon the rational element in hu- 
man nature which not even the action of the most 
highly developed individuals, to say nothing of 



nations, could justify. The natives are to 
abandon the entire complex of customs and be- 
liefs which have thus far guided them through 
life, and by an act of selective reason, to adopt in- 
stitutions foreign to their social experience. Mod- 
ern science is agreed that inherited psychological 
elements the constitution of the mind are the 
most persistent phenomena of which we have any 
knowledge. New ideas may be poured into the 
consciousness, may even be understood by the 
rational faculties, but they will leave no trace 
upon the mental constitution and upon the real 
spring of action. The most conclusive proof of 
this is found in the psychology of those races 
which have come, through the chance of history, 
under the control of different conquerors. 
Through numberless generations under the most 
varied historical conditions and environments, 
the descendants of the same race will continue to 
develop similar psychological traits. Thus parts 
of the Malay race have been for centuries under 
the rule of three different European peoples; 
nevertheless the Filipinos with their Spanish in- 
struction, the Javans trained under the Dutch 
colonial system, and the Malays of the mainland 
who have been under English tutelage, all display 
identical characteristics and have the same intel- 
lectual constitution which the earliest explorers 
noted in their day. In the same way we may 
trace among the negroes of the United States, of 
Hayti, and of Martinique, the same psychological 
tendencies which are found among their distant 



relatives in the African forests. The actual ex- 
perience of colonizing nations and the results of 
scientific investigation leave room for but one 
opinion upon the policy of assimilation, that it 
rests upon a purely ideological basis and runs 
counter to the scientific laws of psychic develop- 

The very first requirement in laying the foun- 
dations of a colonial policy, is therefore the care- 
ful study of the ethnical character of the races 
with whom we come in contact. The ethnolog- 
ical survey is thus one of the most important 
parts of colonial administration. We must learn 
to respect the psychological and social character 
of the people with whom we have to deal respect 
it sufficiently at least to become acquainted with 
it, to study it carefully, and to analyze its ele- 
ments. 1 When we consider the difference be- 
tween the highly trained, industrious, peaceable, 
frugal Chinese, and the shiftless, indolent Malays, 
between the dreamy, philosophical Burmans, and 
the warlike, laborious tribes of Central India ; be- 
tween the fellaheen of Egypt, the Moors of Al- 
geria and the multitude of negro races in Central 
and Southern Africa ; the very idea that one set 
of institutions, one form of social practice, could 
be applicable to all these multiform societies, 
would seem the result of pure ignorance. What 
the colonial administrator needs above all else is 

*The most successful investigation into the psychology of 
native populations has been carried on by the ethnological de- 
partment of the Dutch colonial government under the council- 
lor on native affairs, Mr. Snouck-Hurgronje. 



insight and imagination. Not the abstract im- 
agination which would create an artificial system, 
but the reconstructive imagination which is able 
to understand the social conditions of an alien 
population. In colonial affairs we are in need 
more of the sense of justice than of benevolence. 
Nothing is more dangerous than an active be- 
nevolence without a proper knowledge of the civ- 
ilizations with which it interferes. But the sense 
of justice which accords them a certain right to 
live, which agrees that there may be a justifica- 
tion for divergence from our standards, is abso- 
lutely essential for lasting results in colonial ad- 
ministration. Native societies themselves desire 
justice rather than benevolent interference, 1 and 
appreciate far more a ruler who respects their 
customs while governing them with a strong 
hand, than one who, under the claim of humanity 
and benevolence, meddles with their every social 
arrangement and institution. 

But, we may well ask, if we are not to use our 
civilization as a criterion for our colonial activi- 
ties, how shall we be guided in the construction 
of a colonial policy? Are we to follow simply the 
most material needs of our commerce and indus- 
try, and totally disregarding the higher civiliza- 
tion of the natives, allow them to shift for them- 
selves ; or is there some way in which we can un- 
derstand the needs of their own civilizations and 
assist them in realizing their destiny? The sim- 

1 It is an Arab proverb that one day of justice is better than 
seventy years of good wishes. 



plest answer, and one that appeals to many minds, 
is that we should let all these alien societies alone, 
and allow them to develop unhindered, because 
no nation has the right to regard itself as a provi- 
dence for the social regeneration of other races. 
But when we consider that we have actually be- 
come responsible for the destiny of great multi- 
tudes of people, and that this responsibility can- 
not practically be avoided, we shall not be satis- 
fied with any such negative statement of our 
duties and relations. We need a more positive 
guide, one also that will harmonize our attitude 
toward the various elements in civilization. May 
we not after all find in our own civilization the 
guidance which we seek? We have found that, 
statically considered, as a definite system of cus- 
toms and institutions, we cannot apply it directly 
in solving the problems of colonial development. 
It has become clear that we cannot confer by acts 
of legislation the results of our social and polit- 
ical, evolution upon an alien people. The fruits of 
civilization cannot thus be transferred. But will 
not a study of the dynamic elements that have as- 
sured our social progress give us some clue as to 
a proper colonial policy? While we may well 
despair of bestowing upon an alien race the entire 
complex system of our civilized institutions and 
customs and beliefs, may it not be possible to 
modify their social evolution in accordance with 
our experience and thus to obtain for them gradu- 
ally a higher degree of social well-being and effi- 
ciency? The evolutionary and structural ideals 



of our civilization may be of greater value in this 
matter than its positive standards and its result- 
ants in our own social life. 

Defined from the structural point of view, civ- 
ilization implies a social organization of highly 
centralized energy combined with great mobility 
of the individual parts. This mobility involves 
the absence of a deadening fixation of activities 
by custom or caste, leaving the individual free to 
seek the line of endeavor in which his own ener- 
gies may find their best and most fruitful expres- 
sion. It involves a constant betterment of the 
condition of humanity through invention, and 
consequently an intensive cultivation of the nat- 
ural resources of the civilized state. The surplus 
thus obtained enables the civilized society to de- 
vote a large part of its energies to the advance- 
ment of education, art, and science. The distinc- 
tion between civilization and barbarism lies there- 
fore primarily in the mobility of social forces and 
in the readiness with which they are able to con- 
centrate their efforts at any given point. The 
impact thus produced, no barbarian society can 
withstand. The positive superiority of a given 
society is thus not due to the presence of a large 
armed force but to the maintenance of conditions 
which will enable it to bring to bear at any time 
and at any given point the entire national energy. 

It is imperative that we should clearly see that 
in colonial politics we have to deal with societies 
in their broadest aspects with civilizations and 
not with individuals. The greatest mischief is 



wrought by looking upon the natives as so many 
individuals, clay to the hands of the potter, to be 
fashioned with ease into some resemblance to 
European or American. It is only as we modify 
the structure, principles, and customs, of native 
societies, that we can exert any lasting influence 
upon individuals. Just as the quality of our 
Western civilization depends closely upon social 
structure, so though in a much larger degree as 
social cohesion is much stronger in the lower 
strata of mankind the civilization of a Hindu, or 
a Malay, or a Hausa, depends not upon what we 
can teach him individually but how we can affect 
the structural character of the society to which 
he belongs. To modify the direction of social 
evolution by slow and natural methods, is the 
most ambitious program we can in reason set 
for ourselves ; to take a Tagalog and make of him 
an American is the naive impulse of inexperience. 
For though isolated individuals may adopt the 
best thought of a higher civilization we need but 
think of the negro valedictorians in our universi- 
ties and of men like the Maharajah Dhuleep 
Singh they cannot hold out against the social 
influences of their own race, nor can they impart 
to it their acquired civilization. Societies must 
be viewed as a whole, united by the strong bonds 
of tradition and of lasting and intimate relations 
among their members. There is a life purpose, 
unconscious though it may be, even in the lowest 
forms of civilization. This we cannot simply 
suppress by rough-shod measures, and substitute 



for it, point blank and indiscriminately, the pur- 
poses and methods of our own civilization. In- 
deed we can do no more than, by gradually sub- 
stituting new economic forces and new social mo- 
tives, to foster a development in the general direc- 
tion of our own civilization. 

Bearing in mind constantly the path which our 
own social evolution has traveled, and analyzing 
the conditions of its development and progress, 
we shall give attention first of all to the creation 
of a sound economic basis for social life in the col- 
onies. The development of a productive, in place 
of a purely consumptive, economy, and an assur- 
ance of the increasing mobility of all factors in 
economic life, are the first desiderata. All the 
higher elements of civilization can be obtained 
only as the fruit of a wise and perfectly adjusted 
economic system. The art of Florence arose 
after mediaeval humanity had served a long and 
laborious apprenticeship in industrial life, and the 
dramas of Shakespeare could not have been writ- 
ten had the nation been living merely from hand 
to mouth. The most elementary purpose of a 
civilized colonial policy would therefore seem to 
be the prevention of the reckless and destructive 
use of the natural wealth in forests and mines for 
mere private profit, and the encouragement of 
settled agricultural and industrial pursuits. The 
greatest among the American negroes clearly per- 
ceives, and founds his life-work upon, the fact 
that a race cannot be given a self-sufficing posi- 
tion in civilized life unless it has a sound eco- 



nomic organization, and unless it has trained it- 
self to productive industry. 

Among the essential duties of a civilized state 
there is none more important than the guarantee 
to every individual under its rule of the condi- 
tions which make healthy life possible. As long 
as a state has not solved this elementary problem, 
as long as periodical famines sweep away large 
numbers of peasants, or accumulations of filth 
make residence in the towns a constant danger to 
health and life, the state or society which permits 
such conditions cannot be called fully civilized. 
No efforts should therefore be spared in the pre- 
vention of plague and famine, the two dark thun- 
derclouds which overhang backward communi- 
ties and which relentlessly threaten suffering and 
destruction. No society, no group of individuals, 
can attain to a state of self-realization and of true 
inward freedom, as long as it is under the spell of 
such sinister powers. 

It is, however, not only our duty to free these 
populations from terrors and dangers inherent in 
their civilization and surroundings, but to protect 
them against the even more serious risks which 
are involved in the meeting of civilizations on dif- 
ferent planes of development. These dangers 
are twofold, arising from the use of deleterious 
substances and modes of life, or from the creation 
of an apparent individual freedom of contract, 
which, however, usually results in the entire de- 
struction of economic independence. The surest 
means of protection against these risks lie in a 


scrupulous maintenance of the native morale and 
social oganization; any attempt to deal with na- 
. tives merely as individuals in the Western sense, 
will without fail endanger their independence, 
their health, and their life. It has been abun- 
dantly experienced that when the ordinary mem- 
bers of a backward race are dissociated from the 
organism to which they belong and are brought 
into direct contact with a higher society, they will 
usually lose their native morale and adopt only 
the dangerous and even vicious sides of the ad- 
vanced civilization. The only way to protect the 
individual is to protect the society to which he 
belongs, and if any improvement of his condition 
be attempted it should not involve the weakening 
of social relations. 

To foster the cohesion and self-realization of 
native societies, while at the same time providing 
the economic basis for a higher form of organiza- 
tion that should be the substructure of an en- 
lightened colonial policy. We can conceive of no 
greater crime than the wanton destruction of such 
societies, for it involves the moral and physical 
degeneration of their members. This is true of 
even the lower forms ; there is no excuse for de- 
stroying the tribal organization, it should be al- 
lowed to develop into the higher phases of social 
life. But when we have to deal with such nations 
as the Anamites, Burmans, and Chinese, the in- 
sensate folly and criminal cruelty of treating their 
civilization as mere rubbish to be cleared away, 
would seem too apparent to need further empha- 



sis. Such nations should rather be encouraged 
to take pride in their own historic character, to 
develop their marvelous inborn artistic talents, 
and thus to impart to the general civilization of 
the world new and rare treasures, than to be 
treated as unworthy savages fit only for work as 
beasts of burden and for an apish imitation of 
European forms. 

When we consider the specific basis of a co- 
lonial policy with respect to the native races, we 
shall see that it rests upon a foundation composed 
of a few simple economic principles. In such an 
investigation it becomes clear that while Western 
societies in their contact with the natives of Af- 
rica and Asia will be able to accomplish certain 
useful results, they are on the other hand attempt- 
ing many things which it will be impossible to 
attain under the present methods. The one in- 
disputable blessing which Western nations are 
bestowing on primitive races is that of peace. 
This is the greatest achievement of the European 
regime in India and in Africa. The terrible inter- 
tribal warfare and the bloody raids organized by 
Arab slave drivers in Africa have largely been 
put an end to and have given place to more peace- 
ful occupations. In connection with this, a civ- 
ilizing colonial policy will also improve the gen- 
eral conditions of life. The introduction of a sci- 
entific medical service and of advanced principles 
of sanitation is a primary duty of colonial admin- 
istration. The most fundamental conditions of 
Jife being thus assured, it is necessary that mobil- 



ity of the elements in economic action and free 
mutual intercourse be made possible by the open- 
ing up of routes connecting the various regions 
and making them accessible to the populations of 
one another. The construction of roads and rail- 
ways is one of the most potent agencies of civili- 
zation. In that way alone is the penetration of 
the methods and products of civilization to the 
interior regions made possible. In order to pro- 
vide for improvements such as these as well as to 
undertake lines of industrial development which 
surpass the capacity of the natives it is necessary 
that capital should be invited to participate in the 
development of new regions and that such invest- 
ments should be rendered as safe as possible. 
The native population should be trained in indus- 
trial pursuits as well as in the arts of agriculture 
so as to be able to utilize the natural resources 
without exhausting or destroying them. The 
substitution of intensive methods for the exhaus- 
tive barbarian exploitation which is now the rule 
throughout Africa as well as in other undevel- 
oped regions of the world is an essential purpose 
of a civilizing policy. 

But when we come to the higher elements in 
civilization intellectual culture and religion the 
road is not so plain nor is it at all certain that an 
attempt directly to influence the more primitive 
races will at first be successful. In this connec- 
tion we must again remember that we are dealing 
not with individuals but with societies, and that 
it is impossible to change the complexion, the 


character, and the morale of a society by giving 
a certain intellectual education to a few among its 
members. We have already dwelt upon the fact 
that civilization can affect the condition of back- 
ward societies only by setting in operation eco- 
nomic forces which will gradually modify the so- 
cial stucture. But the attempt to eradicate the 
intellectual character of these peoples and to sub- 
stitute for it the complex intellectual and moral 
culture of Western civilization through the proc- 
ess of instruction, cannot in the nature of things 
be accompanied with any large measure of suc- 
cess. Psychological characteristics are perhaps 
subject to modification, but only very gradually, 
in the course of centuries and as a result of radi- 
cal structural modifications. The British policy 
of educating the Hindus according to European 
methods has failed and has produced lamentable 
results, because it entirely overlooked the truth 
that we cannot modify societies by giving them 
the accessories, even the highest, of another civ- 
ilization, but only by influencing structural de- 
velopment. As in the case of India, so in general, 
this can be effected only by changing the eco- 
nomic basis on which the social structure rests. 
The form of education which will yield the great- 
est results is technical training, accompanying 
the actual development of economic life and the 
growing consciousness of control over natural 
forces. The political organization that will be 
most potent in influencing social growth is the 
city; and through the creation of a true com- 



munal life in towns and cities lies the road to the 
ultimate self-realization of native societies. Just 
as national life in the West is only an expansion 
and development of the ideals and institutions of 
the classic and mediaeval city state. 

A more rapid and direct influence could be 
looked for, should race mixture between Euro- 
peans and natives throughout the tropics be- 
come general. Were the conditions in the trop- 
ics such that Europeans could freely intermarry 
with the native populations the problems we are 
considering would assume an entirely different 
aspect, for, as in the white population of the 
United States, there would come into being a new 
race. Through the amalgamation of racial char- 
acteristics there would arise new beliefs, customs, 
and ideals, in fact a new philosophy of life and a 
new intellectual constitution. Though in the 
past there has been some mixture of European 
and native blood, and especially the Latin races 
have shown themselves willing to enter more 
freely into alliance with dependent races, it still 
remains true that the results of such racial union 
have not been of the most encouraging nature. 
The mixed breeds have at times, as in the case of 
the mulattoes, shown great excellence of phy- 
sique and considerable power of mind; in most 
cases, however, they have appeared rather as de- 
generate types. They have occupied an unfortu- 
nate social position, being looked down upon and 
suspected by both of the races from whom they 
have descended, and becoming the easy prey to 
3 33 


vice and to general decadence. At the present 
time the tendency toward race mixture is less 
strong than ever before. Races are becoming 
mutually exclusive, and especially those which 
consider themselves higher show a strong desire 
of keeping their blood pure. It is therefore not 
to be expected that the psychological differences 
which separate white and colored mankind will 
be modified by racial mixture. 

The side from which the intellectual nature of 
the non-European races will perhaps prove most 
accessible is that which is connected with the 
mastery of nature. The people of both Asia and 
Africa have lived under the overpowering influ- 
ence of resistless natural phenomena. The 
primeval forest world of Africa, the typhoons and 
floods of the East Indian islands, the famine and 
pestilence of India, her vast mountains, and the 
ferocious rivers of China, which bring destruc- 
tion to millions every few decades these are phe- 
nomena the like of which the Western world does 
not know. With us nature is more docile and 
of greater amenity. It is consequently not a 
matter of surprise that the forces of nature should 
have been understood and mastered first by the 
Western mind. It is through this mastery that 
the Western peoples can impress other nations 
most successfully with a sense of their superior- 
ity. By relieving the tyranny which nature now 
exercises in the primitive forests of Africa and in 
plague-stricken India, Western civilization may 
become the Prometheus of the nations that are 



yet in bondage. The mastery of the resources 
and forces of nature has given us a new concep- 
tion of life, it has relieved us from the fear of the 
capricious powers by which primitive man sees 
himself threatened on all sides. When we look 
back to the mediaeval man, whose belief in mir- 
acles, amulets, and incantations does not put him 
at a very great distance from modern barbarians, 
we feel that our command over natural forces 
makes a return to the mediaeval point of view 
hardly conceivable. As we prepare the more 
backward races to share in this mastery over na- 
ture, they will also have a better understanding 
of our intellectual life and of our beliefs. The 
haughtiest Brahman even stops to wonder as he 
sees the processes of electrical industry and notes 
the sure grasp with which the forces of nature are 
made subject to the human will. 

"From the ground up" should be the motto of 
an intelligent colonial policy. Not to attempt to 
bestow upon the backward races the blessings of 
a civilization which they cannot understand and 
which may be a deadly poison in the form in which 
they are offered ; but to work in alliance with the* 
universal forces of social evolution, to battle 
against the exploitative tendencies which would 
carry us back into another age of barbarism more 
cruel and more difficult to overcome than any for- 
mer one, and to give to the more primitive socie- 
ties a secure economic foundation for future prog- 
ress and development these should constitute the 
elements of a sound colonial policy. If we re- 



strict our efforts to those things which we clearly 
see can be accomplished to the maintenance of 
peace, the protection of health, the creation of 
adequate means of communication, and assistance 
in industrial development; if we set our face 
firmly against slavery and exhaustive exploita- 
tion in all its forms, we may rely upon the work- 
ing out of the colonial problem with the same con- 
fidence that we place in the mechanism of a com- 
plicated electrical motor. But in order to obtain 
such results patience is most needful. Civiliza- 
tion cannot be transferred as a whole. To deal 
with intellectual and spiritual matters directly, 
involves such difficult psychological considera- 
tions, such incalculable contingencies, that in an 
effort to develop a constructive colonial policy, it 
seems wiser to make sure first of the things in 
which at least a somewhat clearer forecast of re- 
sults, and a somewhat safer calculation of effects 
can be had, than is the case with impulses and 
enthusiasms the range of which passes at present 
the scope of careful analysis. Activities along 
these lines are by no means to be discouraged, 
but they fall into a different sphere from that 
which the legislator and administrator can hope 
to deal with successfully. One principle seems 
clear enough, namely, that our moral civilization 
cannot be propagated by laws, perhaps not even 
by exhortation, but that the only true civilizing 
influence is example freely followed. Thus the 
primitive Germans voluntarily chose their Roman 
neighbors as models for their action, and Japan 



to-day is of her free will imitating our institutions 
and methods because she recognizes in them a 
certain superiority. By setting up models of ac- 
tion and conduct which will be gladly and spon- 
taneously imitated by other races, the Western 
nations may indeed hope to exert a powerful civ- 
ilizing influence. 

It will therefore be wise for the colonial legis- 
lator not to attempt too much, not to have too 
ambitious a program. But if rightly planned, 
the economic reforms which it is in his power to 
effect with success, may, like the massive archi- 
tecture of a cathedral crypt, in time upbear an 
edifice which will answer larger purposes than 
those of mere economic welfare and progress. 




In any attempt to improve the social condition 
of the natives, education will naturally play a 
large part. We have become accustomed to look 
upon education, not only as a condition of social 
improvement, but as the principal means of bring- 
ing it about. In the educational systems of the 
West, the intellectual factor has thus far been 
accorded preeminence; and as all the Western 
nations have a common fund of historical and 
philosophical traditions, it is very natural for 
them to conclude that their intellectual education 
will always and everywhere constitute a liberat- 
ing influence and a sure means of social progress. 
Yet this education, adapted as it is to the highly 
complex psychology of the Western nations, by 
no means constitutes equally nourishing food for 
other races. We may indeed instruct these races 
by giving them the results of our learning, but 
whether we can thus really educate them is a dif- 
ferent matter. 

Any careful analysis of the meaning of educa- 
tion will reveal that one of its principal elements 
is adaptation to social environment. The intel- 



lect could be trained to a very high degree of effi- 
ciency by the study of Chinese ideographs or 
Samkhya philosophy, yet no one thinks of adopt- 
ing these disciplines in our schools, because they 
plainly do not render a mind more able to adapt 
itself to the environment of Western society. 
Similarly, the classics of Rome, the eighteenth 
century literature of England, and the philoso- 
phy of Locke, may be instructive to the Oriental 
mind, but it will be very difficult for it to get any 
true educational value out of such studies. We 
educate a mind when we open it to an under- 
standing of the social phenomena that surround 
it, when we give it a grasp upon the principles of 
existence which affect its being, when we give it 
the power to act creatively by formulating sug- 
gestions and modes of action which will find a re- 
sponse among contemporaries. Mere instruc- 
tion, on the other hand, may store the mind with 
a marvelous amount of knowledge while leaving 
it helplessly adrift on the current of contempo- 
rary life. 

Bearing in mind the essential purpose of educa- 
tion, as social adjustment, it will be seen that an 
educational system can be constructed only with 
a thorough knowledge of the social conditions 
upon which it is to operate. We must be familiar 
with the intellectual_and moral history of a race 
to know what disciplines have been helpful to it 
in the past; we must be exceedingly careful to 
determine what are the educational requisites of 
the social institutions established and upon which 

-' " 39 


social order rests, so that we may not introduce 
elements of a revolutionary and destructive na- 
ture. Thus the ancestor worship, the solidarity 
of the family, the respect for intellectual author- 
ity, which are found in most Oriental countries, 
should be taken account of in any system of edu- 
cation introduced. It is further important that 
the religious beliefs of a race > .comprising and in- 
terpreting the most important social motives, 
should be considered and utilized in education. 
The capacity of a race as revealing itself in the 
contemporary expression of its racial genius, 
should form the basis upon which future intel- 
lectual and moral development is to be planned. 
Frequently a race may be mistaken as to its own 
capacity. We need here but instance the well- 
known fact that negro populations, wherever 
found, whether in Central Africa, the West In- 
dies, or the American states, are eager to acquire 
a literary education. But it is not difficult to see 
that their real motive is a desire for an appear- 
ance of equality with the white race, and that we 
have not here to deal with an essential intellectual 
need of the negroes. Their real needs would be 
far better served by a careful training in science 
and the arts than in the fashionable literary 
branches. Finally, it is of prime importance that 
we should not overlook the economic condition of 
a race ; that we should not arrange" for it an edu- 
cation which has no connection with its economic 
needs, and that one of the first aims of a rational 
education should be the mastery over economic 



forces and the improvement of economic condi- 
tions. Argument is not required to show that a 
system of education which produces satisfactory 
results in an industrial society, controlling bound- 
less sources of wealth and very free in its religious 
beliefs, would not be suitable to an agricultural 
society dominated by powerful religious ideas 
and by a strict caste organization and living on a 
low plane of comfort and social well-being. 

While it is apparent that each colony and each 
racial element within a colony must be studied 
separately in all their characteristics before a suit- 
able educational system can be provided ; it may 
nevertheless be said that there are four great 
classes of populations with whom we have to 
deal: namely, savage races, those populations 
whose social cohesion has been impaired or des- 
troyed, the Mohammedan races, and other races 
of a higher civilization. To many it may seem 
that savage races are, in the matter of education, 
as a white sheet upon which anything may be 
written. Yet while they may not have a compli- 
cated religious and social system and a venerable 
literature which command our respect, neverthe- 
less their social conditions and their psychology 
differentiate them to such an extent from each 
other that no general educational scheme can be 
constructed for them. Where savage races have 
had their original social cohesion destroyed, 
either by being transported to other countries as 
slaves, or, as in the Philippine Islands under the 
Spanish regime, by an attempt to level their in- 



stitutions and to assimilate their life to that of 
a European nation, there is perhaps the nearest 
approach to an open field for educational experi- 
ments. As indigenous social institutions do 
not exist among such natives, they are more read- 
ily influenced to adopt new standards. But even 
here a little deeper study reveals the presence of 
psychological factors, which necessitate a modifi- 
cation of all our educational ideas. For it is im- 
possible to destroy all social affinities and the 
mental constitution persists even through radical 
political changes. When we deal with the higher 
races, we are forced to take position with respect 
to social institutions and intellectual character- 
istics of great power and endurance. This is 
especially true of the Mohammedan world. 
Welded together by a narrow but thorough 
study of their sacred book, the Mohammedans 
present more resistance to the introduction of 
alien ideas than any other population, and in 
their case, education must account with the 
native institutions as unities which can be but 
little modified and upon which such future edu- 
cation as may be developed must be primarily 
founded. Among other races of a higher civili- 
zation, such as the Hindus, the Anamites, and the 
Chinese, while there may be a slightly less per- 
sistent attachment to the racial philosophy, it 
would still be impolitic as well as fruitless to 
interfere in such a manner as to attack those ideas 
and beliefs which constitute the moral character 
of a race, and which have been developed in re- 



sponse to its intellectual and material needs 
through an evolution of many centuries. 

We are met on the threshold by the question, 
what language is to be used in the education of 
the native races in the colonies? It is of course 
far more convenient to the colonizing nation to 
force the natives to learn its own language than 
to trouble the colonial officials with a number of 
native dialects; moreover it may be urged that 
the acquisition of a European language is at all 
times an advantage to an African or Asiatic. Yet 
it must be considered that the adoption of a Euro- 
pean language as the language of instruction 
would imply an utter severance of the intellectual 
and moral development among the natives from 
their past history. It is through language that the 
elements of a civilization are handed down from 
generation to generation ; and it is only by a use 
of the native language in the schools that the 
higher elements of a native literature, religion or 
philosophical system may be perpetuated. Wher- 
ever a language is spoken over a large area, 
wherever it has literary quality and a literary his- 
tory, wherever it embodies the moral concepts of 
a nation, wherever it promises to be an efficient 
vehicle of their future thought, the primary or 
common school education at least should be in 
that language. In the few cases where a differ- 
ent course has been taken, the result has been so 
undesirable that the attempt was abandoned. 
Thus when the French began their colonial activ- 
ities in Cochin-China, they introduced a system 



of instruction in which the Roman alphabet was 
used instead of the Chinese word-signs. While 
this was not so serious a matter as the complete 
supersession of a language, it nevertheless re- 
sulted in cutting off the Indo-Chinese from the 
literature of China from which their intellectual 
nourishment had theretofore been drawn. More- 
over, the fact that the study of French was 
strongly encouraged by making it the passport 
to official position, led to an almost complete 
breakdown in the system of native education. 
The results were so undesirable that the colonial 
government decided not to interfere with the in- 
herited system of education in Tongking and 
Anam. 1 In most of the other great tropical 
dependencies, the language of the natives is used 
in popular instruction. This is true of India, 
Ceylon, Egypt, the Dutch possessions, and Tunis. 
The West Indies, South Africa, and the Philip- 
pine Islands occupy a somewhat exceptional 
position. In the West Indies and South Africa 
the racial solidarity of the negroes has been des- 
troyed through slavery and migration. It was 
therefore natural that a general language should 
be adopted by them. In South Africa the negroes 
use either the Hottentot dialect, Dutch, or Eng- 
lish ; and in the West Indies, either English or 

*The colonial government has of late even encouraged the 
study of the Anamite language among the French officials in 
Indo-China ; proficiency is rewarded by promotion to a higher 
class in the civil service. But recently two officials who had 
thus gained the right of promotion were transferred, the one 
to Madagascar, the other to the Sudan. 



Spanish. The language of instruction among 
the negroes in these colonies is therefore usually 
the general language which they have adopted as 
their vernacular. The Philippine Islands have a 
multitude of dialects; and notwithstanding the 
attempts of the Spanish to introduce their lan- 
guage, no common medium has thus far gained 
currency. It was therefore argued by the Philip- 
pine Commission that as a common language 
would be indispensable to the Philippine people 
in the future, it would be more rational to intro- 
duce English than to attempt further to spread 
the Spanish language. As English is per se the 
most useful European language in the Orient and 
will be for an indefinite time the language of the 
government, it would certainly be an unnecessary 
complication of matters to use Spanish or to im- 
pose one of the dialects or the Malay idiom upon 
all the islands. While the American government 
cannot fairly be criticised for introducing its own 
language, it might have been wise to give the 
native dialects a greater prominence in the cur- 
riculum. Though the Philippine dialects have 
thus far not produced a literature, they are un- 
doubtedly well adapted to express the feelings of 
the Philippine races, and to preserve the more 
intimate elements of popular civilization. In the 
colonies of Central Africa the mission schools 
have usually introduced the language of their 
nationality in their instruction, and the German 
government has followed this same policy in the 
government schools of Kamerun. 



While as a general rule the native vernacular 
is used in primary instruction, it is more common 
to use a European language in the secondary and 
higher schools. Thus in Egypt the French lan- 
guage was used until recently in the academies, 
where it is now being rapidly displaced by Eng- 
lish. The language of the governing nation is 
also used in the higher schools of India, Ceylon, 
Indo-China, and Algeria. In the Dutch East 
Indies alone is the language of the mother coun- 
try treated like that of a foreign nation. 

When we turn to the subject matter of instruc- 
tion, we shall find that in most colonial dependen- 
cies a system of purely literary education has 
been introduced. Thus the educational policy in 
the Indian Empire has been based upon the belief 
that the natives would readily abandon their in- 
herited ideas when familiarized with the intellec- 
tual culture of Europe. 1 India has five nominal 
universities which are simply examining bodies 
conducting the entrance examinations for the 191 
affiliated colleges as well as the examinations for 
degrees. The secondary or high schools, 2 which 
prepare students for college, use English as the 
medium of instruction, and teach history, litera- 
ture, language, mathematics, and a certain amount 
of science. After having passed his examination 
for entrance to a college, the student usually pur- 
sues, for a period of two to four years, an "arts 
course" planned entirely upon English prece- 

1 See Lord Macaulay's Minute on Education. 

3 There were in 1904, 5,493 with 558,000 scholars. 



dents. At the end of two years the so-called "arts 
examination" is taken, while the successful com- 
pletion of the four years' course leads to the bach- 
elor's degree, which may be supplemented after 
another year's study by the A. M. There are also 
several professional colleges of medicine and law, 
which the student may enter after he has passed 
his arts examination, or after he has taken his 
degree. In most of these colleges practically no 
attention is given to the literature, philosophy, and 
history of India. As the university examinations 
were until quite recently the sole passport to offi- 
cial position, the prime purpose of the Indian 
youth has been not so much to acquire an educa- 
tion, but to be admitted into the government serv- 
ice. The system has in general had a most un- 
fortunate effect upon the intellectual life of India, 
introducing elements entirely alien to Indian cul- 
ture, which have turned the minds of Indian edu- 
cated men away from the development of their 
inherited philosophical and literary civilization. 
'It has failed to train the reasoning powers and 
has led to an abnormal development of memory. 
Knowledge, acquired mechanically, has not ex- 
ercised a liberating, strengthening influence upon 
the Indian mind. Moreover, as an entirely mis- 
taken conception of Indian history is contained in 
the English classics of the eighteenth century, 
the youth of India have been led to take a wrong 
view of their own history, a view which is entirely 
unjust to the English conquerors. The bitter 
language of the party struggles in England in the 



time of Fox and Burke is readily transferred to 
Indian affairs and is reproduced in a highly exag- 
gerated style in the native press. Morally, the 
result of this system has been to destroy the 
inherited philosophical and religious conceptions 
of the educated youth, without substituting a 
coherent and satisfactory system in their place. 
There are, however, in recent Indian educational 
development certain facts which give some hint 
as to what direction should be taken in order to 
arrive at more satisfactory results. There has 
been founded at Aligarh a college for Mohamme- 
dan students, in which Mohammedan religion, 
philosophy, and jurisprudence constitute the 
backbone of education. 1 No Western literature 
or philosophy is taught, but thorough instruction 
is given in science and in the methods of scientific 
investigation. This school has achieved a high 
degree of success. Its graduates have developed 
in character as well as in intellect, their minds 
have not been confused by a mass of unassimi- 
lated knowledge, and they have obtained a good 
hold on the scientific methods of the West. This 
instance has proved conclusively that the char- 
acteristic achievement of Western civilization, 
scientific mastery of nature, may be imparted suc- 
cessfully to men who at the same time are follow- 

1 The Mohammedan tnadrasa at Calcutta, founded by War- 
ren Hastings, anticipates this latter foundation of Sir Syad 
Ahmed Khan. But the wise policy of Hastings was abandoned 
by the government under the influence of Macaulay's ideas, and 
Mohammedan colleges were for a long period treated with 
great illiberality. 



ing their oriental studies in literature and philos- 
ophy. A similar principle is revealed by the great 
efficiency of medical and legal education among 
the Hindus. The Hindu physicians and sur- 
geons, trained in European methods, are most 
excellent practitioners; they have gained a pre- 
cision of thought, a power of clear observation, 
which the Oriental mind in general lacks. This 
power is apparently not developed by the literary 
training imparted in Indian colleges. When the 
literature of a race or nation is studied as an ex- 
pression of life, literary culture implies a high 
form of training, for it arouses the mind to the 
keenest criticism of life in all its forms. But to 
the Oriental, European literature is an alien prod- 
uct and can never be synonymous with life; to 
attempt to train his mind entirely in what to him 
can never lose the character of artificiality, is a 
mistaken idea of education. 

Wherever the ideal of a literary training has 
been followed in the colonies, unsatisfactory re- 
sults have been produced. In Egypt, Burma, 
and Ceylon, the native students in the higher 
schools will acquire a good memory knowledge 
of English literary subjects, but their main pur- 
pose, also, is to gain official position. In South 
Africa, in Central Africa, and in Jamaica, the 
negro population has been very anxious to pur- 
sue literary studies, but by the testimony of all 
observers, the results have not been conducive to 
real social improvement. The defect of a pri- 
marily literary training lies in the fact that it dis- 
4 49 


tracts attention from the real intellectual needs 
of a race. Being essentially indefinite, founded 
upon suggestion and intuition rather than upon 
direct observation, it does not constitute that 
kind of training which the minds of Orientals and 
Africans specially require, to liberate them from 
the tyranny of ideologist speculation and super- 
stitious beliefs. It ordinarily leads to a danger- 
ous half-education implying a well-trained mem- 
ory but an undeveloped judgment, together with 
an overweening self-confidence and vanity. But 
its-main danger lies in the fact that it raises hopes 
and aspirations which can impossibly be satisfied. 
Not that the aspirations are too lofty for realiza- 
tion per se; the greatest desire of a half-educated 
native is to become a clerk in a business house, or 
preferably in a governmental office. But as the 
number of such positions is limited, the vast mul- 
titudes of natives must in the course of nature 
make themselves useful in other callings, in indus- 
trial and agricultural work. Too often a false 
ideal is created by purely literary training, an 
ideal which looks upon manual labor as degrad- 
ing, as a thing to be avoided. It is the unanimous 
testimony of observers in Jamaica, where a sys- 
tem of universal education has been established 
for some time, that the native population, origi- 
nally not over-fond of manual labor, is becoming 
entirely disinclined to work, and is longing for an 
easy life in town. Such aspirations are danger- 
ous, not only among the masses, but also among 
those better situated. Thus in Egypt the better 



families seem to think of no other career for their 
sons than that of a government official. It is 
apparent that other callings in industrial and sci- 
entific life must be made more attractive to the 
educated, and agricultural and industrial labor to 
the masses, unless conditions of great dissatisfac- 
tion and social unrest are to be produced through- 
out the colonial dependencies. 

Educational agencies can contribute much 
towards the real welfare of the natives by devel- 
oping manual training and agricultural instruc- 
tion, and already promising beginnings have been 
made in this direction. The educational commis- 
sion for South Africa in 1900 agreed upon the 
principle that governmental aid should be given 
only to schools which devoted half of their time 
to manual and agricultural training. Under the 
most recent educational legislation in Jamaica, 
less attention will in future be given to literary 
subjects and to history, and considerable time 
will be devoted to instruction in improved agri- 
cultural methods. The African missions have in 
the past often consumed their energies in ineffi- 
cient methods of education. The instruction 
given by the missions is generally too scholastic, 
and travelers are most severe in their judgment of 
the "missionary-made" man. Dressed in Euro- 
pean clothes and displaying with pride a smatter- 
ing of English education, the "civilized" natives 
love to swagger about in the coast towns, despis- 
ing manual work and the customs of their race. 
They have stripped off the restraints of their na- 


live religions and are far from having adopted the 
morals of Christianity. In order to avoid the con- 
tinuance of conditions like these, the missions are 
now endeavoring to train the natives to habits of 
industry, to instruct them in their native lan- 
guage, and to encourage them in the maintenance 
of all local customs that are not barbarous. 
Many of the missions have succeeded in training 
native carpenters, smiths, tailors, and other han- 
dicraftsmen. The mission buildings are usually 
constructed by the pupils in the missionary 
schools. The missionary orders have been es- 
pecially successful in this respect as their mem- 
bers are usually adepts in the useful arts, and can 
work with the natives not only as instructors, but 
as master-workmen. It is desirable that, where 
manual training is not given to all the pupils, the 
best among them should be selected and special 
distinction should be accorded for proficiency 
in the industrial arts ; the sons of the chieftains 
and of the leading men should be interested in the 
work. It is also very important that handicrafts- 
men who have received their training should be 
given regular work upon leaving the school. 
This can be done by developing the organization 
of the school system so as to require new forces 
at different localities. But the best method of 
providing constant employment is to educate the 
natives to a desire for better dwelling houses and 
articles of furniture. Where manual training is 
made a regular part of general instruction, as in 
Jamaica, it is usual to employ the Sloyd system 



rather than to attempt to give specialized train- 
ing in any handicraft. In less developed coun- 
tries, however, such as the missionary fields of 
Africa, it is of course better to give each native 
pupil a thorough training in some definite branch 
of workmanship. 

In higher education the scientific element 
should be emphasized. Already efficient schools 
of medicine and law, as well as other scientific 
institutions, have been established in India, 
Egypt, Indo-China, Madagascar, and the Phil- 
ippine Islands. But while the natives seem to 
take readily enough to medicine and law, the 
engineering and technical branches have not been 
equally well developed. This is partly due to the 
prejudice which the natives of the upper classes 
have against manual labor, as an engineer ought 
to be able to put his hand to the work to aid his 
force of employees if he desires to be thoroughly 
successful. It will be one of the most difficult 
problems to induce the natives to take a different 
view of industrial pursuits. Thus far, it must be 
said, they have not been much encouraged to 
change their attitude, because the development of 
industries has not been fostered, and the engi- 
neering work has been performed mostly by 

The organization of the school system is far 
from uniform in the various colonies. In the 
Philippine Islands alone has it been attempted to 
establish a system of schools entirely owned and 
managed by the state, and as yet the system has 



by no means been extended to all parts of the 
dependency. In fact, it is not certain how rap- 
idly the economic and financial condition of the 
Philippine Islands will enable the government to 
carry out and complete its policy of general pub- 
lic instruction. In British colonies the usual 
system is to give grants in aid out of the public 
treasury to private or voluntary schools, the latter 
being usually denominational. In India the local 
schools established by the Hindus or Mohamme- 
dans are thus aided by the central government, 
or schools may be established to be supported out 
of the local rates. By the side of grant-in-aid 
schools, the state usually establishes schools in 
localities where none are provided by other agen- 
cies. 1 The requirements of instruction are fixed 
by law. Any school which fails to maintain the 
requisite standard is deprived of its state subsidy. 
The state maintains a system of public inspection 
by which the standing and efficiency of the 
schools is determined. In state schools no relig- 
ious instruction at all is given, although a certain 
time is set aside when the ministers of the various 
religions may teach the pupils. 

In the Dutch East Indies very little was done 
for the primary education of the natives before 
1865. Since that time a large number of native 
schools have been established, which are divided 
into two classes: (a) those which offer instruc- 
tion simply in the respective native language and 
in arithmetic, and (6) those which teach a native 

1 This is the system in use in Jamaica and Ceylon. 


dialect or the Malay language together with 
arithmetic, geography, natural science, the his- 
tory of Java, drawing, and the elements of survey- 
ing. By the side of these state schools a large 
number of Mohammedan schools are maintained 
by the followers of that religion. No religious 
instruction is given in the schools of the state. 

It is a much disputed question as to how far 
the privileges of a common education should be 
extended. At present not very much has been 
done toward the common education of the masses 
in the colonies. In Algeria there are hardly any 
schools for the natives, while the Indo-Chinese 
system is suffering from an uncertainty of public 
policy. In India there are 4,000,000 pupils out 
of a school-age population of 45,000,000. Ceylon 
and Jamaica have of all tropical colonies the high- 
est percentage of school attendance. And yet 
even there, when the actual time of instruction is 
considered, comparatively little has been accom- 
plished, while in Africa only the merest begin- 
ning has been made. It is often urged that the 
entire policy of universal education among the 
natives is mistaken. Herbert Spencer is appealed 
to, who denies "the commonly supposed connec- 
tion between intellectual culture and moral im- 
provement;" and believes "that a society is not 
benefited but injured by artificially increasing 
intelligence without regard to character." 1 It is 
moreover held that such a policy will result only 
in half-education, developing indolent habits in 

1 Spencer, Facts and Comments, p. 84. 



the natives and not giving them any real intel- 
lectual strength. Or, again, it is urged that it 
would be sufficient to educate the upper classes, 
and that whatever education is needed by those 
below will naturally filter down to them. This 
latter view, however, has little in fact to support 
it, as in societies which are still substantially on 
a caste basis the educated classes show no great 
readiness to impart their education to those 
below them. The Philippine Commission de- 
fends the policy of universal education upon the 
ground that it is necessary to render the individ- 
ual peasant independent of the village oligarchy. 
It is argued that a common school education will 
not destroy the inherent love of agriculture but 
will enable the peasant to use better methods and 
thus obtain greater satisfaction from his toil, 
while at the same time it will place him in a posi- 
tion to resist the unwarranted interference with 
his activities on the part of his wealthier neigh- 

It is difficult to see how a rational policy of 
universal education can consistently be con- 
demned, but its efficiency depends entirely upon 
the thoroughness with which instruction is 
adapted to the actual conditions and needs of 
native society. The transfer of a complete sys- 
tem of education to a native race, on the ground 
of its theoretical excellence, is to be avoided, since 
an educational program developed for a nation 
that has long given special attention to intellec- 
tual culture is certainly not suitable for those 



races which are just beginning their course of 
higher development. Moreover, the financial 
capacity of native societies sets rather narrow 
limits to endeavors in this direction. Wherever 
possible the native system of schools should be 
utilized. Throughout Mohammedan lands every 
mosque has its school, and every larger town has 
its madrasa or college. Although the primary 
education consists only in learning by heart cer- 
tain chapters of the Koran, it constitutes a begin- 
ning which ought not to be swept away, but upon 
which the future educational structure may be 
built. The same is true of the Buddhist wat or 
temple schools. In tropical Africa it is likely 
that for a long time to come the missionary 
schools will form the main agency of education. 
With a more practical notion of what the native 
requires for his development, the unlimited de- 
votion of the missionary societies and fraterni- 
ties will produce great results. Whether mis- 
sionary or not, the teacher in the colonies is 
certainly in need of the missionary spirit. To 
work day after day by the side of native boys, 
carefully and painstakingly instructing them in 
the processes of industry, demands a devotion 
which no mere salary can inspire. The greatest 
educational force after all will be example. The 
natives will imitate those whom they can under- 
stand and admire. Too many of the teachers 
that are sent to them, they accept for mere inci- 
dental reasons, without understanding or admir- 
ation. Not school laws, not set programs, nor 



the most well-intentioned ideas about complete 
development, will here take the place of daily con- 
tact between devoted teachers and the native 
populations. It is not sufficient that these teach- 
ers should be active in the normal branches of 
instruction ; they must go down among the ordi- 
nary pupils and work side by side with them, in 
order to teach them by the force of example new 
ideals and a new conception of life. 

Civilization of the Negro Race in Africa. In 
view of the barbarous customs which continue 
to exist among the negro population, many 
investigators have entirely denied the capacity of 
the negro to advance in the scale of civilization. 
The physiological reason assigned for this inabil- 
ity is the fact that the cranial sutures of the negro 
close at a very early age. Negro children, it is 
admitted, are exceedingly bright and quick to 
learn ; remarkable instances of precocious intelli- 
gence among them are frequently observed. 
Thus the young son of Behanzin, the exiled king 
of Dahomey, carried off all the honors at a Par- 
isian lycee to which he had been sent from Mar- 
tinique. But after the age of puberty develop- 
ment soon ceases, the expectations raised by the 
earlier achievements are disappointed, and no 
further intellectual progress is to be looked for. 
It is true, many investigators claim that the 
negro continues his mental growth in adult life 
notwithstanding the physiological fact noticed 
above; but the proofs given in support of this 
favorable view relate rather to increased cunning 



and craftiness in trade than to the growth of gen- 
eral intellectual capacity. No one would deny 
that negroes accumulate experience in later life, 
but organic development of the faculties seems 
to cease at an early stage in practically all cases. 
Even if we accept this unfavorable view, how- 
ever, it does not necessarily follow that the negro 
race is permanently uncivilizable. When we 
look for the causes of the low stage of civiliza- 
tion among the African negroes, we can hardly 
avoid the conclusion that it is due rather to social, 
political and climatic conditions than to the 
physiological, personal incapacity of the negro. 
The difference between the average negro and 
the average European does not explain, nor is it 
at all commensurate to, the difference between 
their respective civilizations. The causes that 
have kept the negro from acquiring a higher 
social organization are closely connected with the 
fact of the constant shifting of the African popu- 
lations, which are not held in place by the phys- 
ical conformation of territory such as that of 
Greece and Italy. The African societies were thus 
not given time to strike roots and to acquire a 
national tradition and history the memory of 
races which is one of the chief ingredients of 

We should here consider how utterly all social 
or national self-consciousness is lacking in the 
negroes, and how localized their interests are. It 
is a suggestive fact in this connection that as 
the negroes have no experience of real social or 



political unity, so their languages can express 
very few general conceptions. In conversing 
with negroes, Europeans constantly note that the 
mind of the individual seems far stronger and 
more apt than the language which he must use to 
express his thoughts. Can we not here surmise 
a subtle connection between the realization of 
true social and national unity and the existence 
in the psychology of a race of those general con- 
ceptions upon which all higher intellectual civili- 
zation is founded ? No more striking proof could 
be found of the truth that we are what we are 
through society, than the fact that the negro race, 
powerful in physique, strong and normal in intel- 
lect, has not achieved a higher social and intellec- 
tual civilization. Should favorable conditions 
for th* existence and development of permanent 
societies in Africa be brought about, it then 
would admit of little doubt that the negro race 
would develop in civilization a civilization 
proper to it, rather than an imitation of the Euro- 
pean type. In view of the fact that the physio- 
logical characteristics of the white race have been 
profoundly modified in the course of its develop- 
ment, it may not seem altogether extravagant to 
say that even the cranial structure of the negro 
race may be affected by a change in its social, 
political, and economic conditions. Or, if we 
should decide that cranial structure lacks all de- 
monstrable importance in this matter, it might at 
least be asserted that if certain conditions inimical 
to intellectual development after puberty are 



removed, the negro race may, notwithstanding its 
unpromising characteristics, develop in civiliza- 
tion. Now, perhaps, the circumstance most un- 
favorable to progress is the powerful strain of 
sensuality in negro nature, which swallows up 
all energies after puberty has been reached. The 
deadly climate of parts of Africa, and the horrid 
conditions of internecine warfare and cannibal- 
ism, have heretofore rendered a high birth rate 
necessary. With more peaceful and settled con- 
ditions, a gradual moderation of the powerful 
sexual impulses could reasonably be expected 
and we might then hope for the growth of intel- 
lectual capacity even after the age of maturity. 
Arab and Hamite Influences. In the past the 
negro race has shown no tendency toward 
higher development except under the tutelage 
of other races; and among the alien civiliza- 
tions that have exerted a profound influence 
upon the African race, that of the Moslem Ham- 
ites and Arabs is the most important. Penetrat- 
ing into Africa from the north by way of the 
Sahara, the cavalry hordes of the Hamites of 
North Africa succeeded in forming reasonably 
permanent states throughout the northern Sudan, 
and in influencing the native negro societies both 
physiologically and intellectually. The great 
principalities founded by the Fulbe in the Niger 
country and by the Tuaregs in the region about 
Timbuctoo are the most striking examples of this 
activity. The states thus founded belong to the 
feudal type; the agricultural negroes form the 



subject peasant class, while the Moslem invaders 
constitute a nobility of armed cavaliers. It ad- 
mits of no doubt that the civilization of Africa 
has been improved by this conquest. The con- 
quering tribes brought with them a written liter- 
ature and many industrial and domestic arts, 
which they imparted to the conquered races. As 
this form of conquest was possible only in the 
regions where cavalry could penetrate, the dense 
primeval forests of Africa where the tzetze fly 
renders the raising and keeping of horses impos- 
sible set limits to the out-and-out conquest by 
Berber and Arab tribes. 

This great forest region, however, the Arabs 
entered from the north and east as traders, and in 
so doing they gave an entirely new and sinister 
meaning to African slavery. As beasts of burden 
cannot survive in these parts of Africa, the trad- 
ers needed human carriers to convey their freight. 
Starting from some commercial town on the 
upper Nile they would purchase a sufficient num- 
ber of slaves to carry their wares into the interior. 
But the goods transported back, the rubber and 
ivory, necessitated a much larger number of car- 
riers, so that a great demand for slaves arose 
wherever the traders penetrated. The chieftains 
of the interior were naturally anxious to obtain 
goods which added to the not very extreme lux- 
ury of their existence. They gave up their slaves 
in payment and reimbursed themselves by mak- 
ing slave raids into neighboring territories. The 
mutual hostility of the African populations was 


thus increased a hundredfold. Negroes them- 
selves, converted to Islam, or negro and Arab 
half-breeds, often became the most cruel slave 
hunters. One of the most notorious of these 
Tippu Tib had an escort of ten thousand armed 
slaves when he made his raids in the neighborhood 
of Nyangwe on the Upper Congo. Whole coun- 
tries were in this way depopulated, among them 
the fertile and prosperous region of the Upper 
Congo, whose entire population was driven from 
its villages, murdered, or carried off into slavery. 
The entire Makololo tribe, whom Stanley had 
visited, was annihilated in such raids, with the ex- 
ception of the women and children who were car- 
ried to the slave markets. The cruelty of this 
traffic and the suffering inflicted upon the cap- 
tives passes description and comprehension. It 
is therefore clear that the Moslems acted as a civ- 
ilizing influence only in the countries where they 
settled down permanently and that they brought 
only woe and destruction to the regions invaded 
by their slave trade. During the centuries when 
slavery was established in the European colo- 
nies and the Southern States, the cruelty and 
oppression of the slave traffic were greatly aggra- 
vated by the demand from these sources. 

In all discussions of African slavery it is very 
important to distinguish between the slave trade 
and domestic serfdom. We have already de- 
scribed the suffering and desolation wrought in 
large parts of Africa by slave raids and transpor- 
tation. Through the efforts of a number of 



humanitarian spirits like Cardinal Lavigerie, the 
public opinion of Europe has been directed to- 
wards the extirpation of the slave trade, and by 
international agreement the traffic is now forbid- 
den throughout the European dominions in 
Africa. It has not, however, been possible as yet 
entirely to suppress it ; in fact such a radical cure 
could be hoped for only after a total revolution 
in the methods of African trade has been accom- 
plished. To-day the slave trade is carried on 
covertly under the name of contract labor even 
by Europeans in their own colonies, especially in 
the Congo Free State and in the Portuguese pos- 

When we consider the real nature of the Afri- 
can slave trade we will see how completely its 
existence is conditioned by the general character 
of African economic life. As slaves are the only 
beasts of burden that can be used in the interior, 
so they are also the most universal and satisfac- 
tory currency. At present, when the slave trade 
cannot be openly carried on in the coast towns, 
the trader will start with a consignment of pow- 
der and guns which are comparatively easy to 
transport. When he reaches the confines of the 
slave holding region he will begin to purchase 
slaves, which he carries with him on his journey 
and uses partly to pay for the ivory and rubber 
which he buys, partly to convey these purchased 
goods back to the trading stations. 1 This com- 

1 An example of the status of African currency is given by 
Miss Kingsley when she describes the fine paid by a local 



bination of servant, carrier, and currency makes 
the slave almost indispensable as long as no rail- 
ways, roads, and metal money exist. In the re- 
moter regions of Africa, this abuse will therefore 
continue to thrive in some more or less veiled 
form until the industrial conditions of the country 
have been changed radically. One result of the 
long continued slave trade is that the population 
of Africa is far below the natural limit and exten- 
sive districts of fertile land are almost entirely 
deserted; an opportunity is thus afforded for 
bringing in large bodies of alien settlers, from 
India or other regions, without any displacement 
of native tribes. 

When we turn to consider domestic slavery 
among the Arabs and negroes in Africa we en- 
counter far fewer abuses. The African slave is 
not looked down upon nor is the door of hope for- 
ever closed to him. Slaves who have survived 
the sufferings of transport, when exhibited in the 
market place of such towns as Kano, 1 in Nigeria, 
are often apparently in the happiest of moods. 
Being an object now of considerable value, they 
are cared for more properly and groomed up so 
as to present the best appearance to intending 

chieftain to a British commissioner for the killing and eating 
of several converts. It consisted of one hundred balls of rub- 
ber, six ivory teeth, four bundles of fibre, three cheeses, a 
canoe, two china basins, and five "ladies in rather bad re- 
pair." The commissioner, being a newcomer, was much as- 
tonished, especially at the last item, but Miss Kingsley assured 
him that they were perfectly "correct" and could be traded off 
for ivory. 

1 This famous slave market has been closed by the British, 
5 65 ' ' ' ' 


purchasers. The slave women know that they 
may, through gaining the favor of their masters, 
become powerful and even be the mothers of 
kings. The male slaves also may rise to impor- 
tance and wealth if luck favors them. Of course 
there is still a good deal of suffering in domestic 
slavery and the separation from home and dear 
ones is most cruel, but it does not mean absolute 
and abject degradation forever, and often it even 
opens the door to new opportunities and to a wel- 
come change of experiences. Still freer from 
abuse are the serfs who have not been sold into 
slavery, but who form a dependent class in the 
country of their birth. 

The slave trade is throughout European colo- 
nies and dependencies made a criminal offense; 
a man so influential as the cousin of the Sultan 
of Zanzibar was imprisoned for six months and 
lost all his slaves by sentence of his sovereign 
relative for being mixed up with the forbidden 
traffic. Domestic slavery, however, cannot be 
dealt with so harshly. The experience in Zanzi- 
bar and Pemba in this respect is most instruc- 
tive. By the decree of the Sultan of Zanzibar any 
slave in the protectorate may demand his freedom 
by simply applying to the so-called Court of 
Slavery. Comparatively few slaves, however, 
make use of this opportunity; thus in the year 
1899 the total number was only 3,757. As a mat- 
ter of fact the slaves in Zanzibar have little to 
gain by seeking emancipation. They are usually 
bound to work for only three days a week on the 



lands of their master; in return for this service 
they receive a house and a land allotment. The 
word "mtumwa," unlike our "slave," carries no 
stigma and is simply a class designation. In fact 
the relation is generally a mild kind of serfdom. 
The slaves often say "Why should we seek free- 
dom ? We have a good home, plenty of food and 
no hard work. Our master is kind and we are 
fond of the children. What should we gain by 
being freed?" The slaves or serfs live in small 
communities around the master's house, where 
they enjoy fellowship and protection; emancipa- 
tion therefore means a loss of caste and home to 
them. When freed, they find life dull and monot- 
onous and have to work too hard for a living. 
They often come before the court asking to be 
returned to slavery and are deeply disappointed 
when this cannot be done. Among those who 
are liberated, a large number become vagrants 
and a public charge. For a time it was attempted 
to enforce Article Six of the Sultan's decree, 
which provides that "any person who applies for 
emancipation shall show that he will have a reg- 
ular domicile and means of subsistence." The 
usual method of showing this was to bring a 
labor contractor who was ready to hire the 
emancipated slave and give him shelter. While 
the two senior missions approved of this method 
as preventing vagrancy, the junior mission, less 
experienced in African affairs, objected on the 
ground that it was merely a way of transferring 
the slave from one master to another, and their 



view was adopted in England. Article Six is 
therefore no longer enforced and vagrancy has 
again increased. The example of Zanzibar is a 
typical one and shows that domestic slavery does 
not press very heavily upon the serfs and that 
those who seek freedom generally become a pub- 
lic charge. 

Slavery among the West Coast negroes is an in- 
stitution which does not at all correspond to what 
we understand by that term. No social disgrace 
attaches to it nor is a slave a mere chattel ; on the 
contrary, his property rights are scrupulously 
respected. He is merely a more dependent mem- 
ber of the community. Thus a "trade boy" slave 
on the West Coast is obliged only to pay a fixed 
amount to his master, and he may in prosperous 
times acquire a good deal of wealth for himself. 
He may then purchase other slaves, and when he 
has become powerful, even free men will place 
themselves under his protection, and he will thus 
become a "king." Even during the last decade, 
of the three most powerful chieftains in the Oil 
River region, two were slaves. The fact that 
a man may be "king" and slave at the same time 
is certainly unprecedented in any other civiliza- 
tion which of itself shows that the West Afri- 
can institution of slavery can in no way be classed 
with that of Rome or of the Southern States. It 
is the African slave trade that is the truly dark 
and terrible side of the institution in Africa. 

The true and complete abolition of slavery can 
only come with a structural change in African 



economic life and can only gradually be brought 
about. The economic ruin of the large Arab 
plantations on the East Coast, which is already 
beginning as a result of the changed economic 
conditions, will throw a larger population into 
the towns and will lead to a parceling out of the 
estates among peasant holders. Among the 
negroes in Central and West Africa, the increased 
opportunity of the slaves for gaining wealth is 
also tending to break down the system. 

European Influences. The basis of European 
intervention in Africa was from the first the clear 
and well-defined interest of commerce both the 
need of depots of trade close to the great reser- 
voirs of the natural wealth of Africa, and the de- 
sire to prevent the native tribes of the coast from 
levying excessive transit dues upon the commerce 
of Europeans and of natives. As this has been 
the primary cause of European interference, so 
the methods employed in African administration 
should have in view first of all the creation of a 
sound economic basis for African life. A civil- 
izing policy must begin at this point. The Afri- 
can negro cannot be civilized by the destruction 
of his native institutions or by pouring into his 
mind the sum of European education. The en- 
tire economic basis of negro society must first be 
changed. With the social growth consequent 
upon this development the individual too will 
become more highly civilized and the gravest 
abuses that now bind the negro race will be over- 
come. With almost mechanical precision it can 



be demonstrated that the reform of the most 
vicious characteristics of African life will be the 
certain consequence of a few simple changes in 
economic organization; and we may indeed an- 
ticipate an unfolding of new and better social 
energies, when the ground has thus been cleared 
of the worst impediments to progress. 

When we consider the future economic and 
social development of the Africans, we encounter 
one prominent fact which will be of prime influ- 
ence in this matter: with the establishment of 
peace throughout Africa, with the stoppage of the 
murderous slave raids and of cannibalism, with 
the introduction of sanitary measures, such as 
vaccination, the population of Africa, which has 
a great natural fecundity, will rise rapidly 
towards the limits of subsistence. While the 
natives are now surrounded with an abundance of 
natural fruits, methods of intensive agriculture 
and of careful industrial work will soon become 
necessary in order to support the growing popu- 
lation. Thus far the African has made his life 
possible by killing his neighbor ; this resource be- 
ing cut off, the only alternative will be to work. 
No legislation, no contract labor system, will then 
be necessary to induce the natives to work more 
steadily. Moreover it should not be believed that 
they are at present without economic wants. As 
a matter of fact, they already require large 
amounts of European manufactured goods and 
their demands are constantly expanding; a cor- 
roding climate and careless habits tend to make 



them more frequent purchasers of textiles than are 
the thrifty Chinese. A policy that would attempt 
unduly to accelerate the operation of these nat- 
ural causes and would not shrink from breaking 
down native societies and employing force, in 
order to gain a quick supply of labor for the ex- 
ploitation of African natural wealth, must be 
qualified as distinctly opposed to the purposes of 
civilizing activity in Africa. The general en- 
slavement of the negro race does not offer a 
proper solution of the problems of African devel- 

An analysis of actual conditions shows that, 
throughout, the foundation of a civilizing policy 
in Africa must be an economic one. The preven- 
tion of wasteful exploitation, the construction of 
roads and railways, the introduction of a metallic 
currency, will do away with the most inhuman 
abuses in African life. They will change the con- 
stitution of African society so as to prevent the 
exploitation of the dependent classes, while the 
establishment of universal peace will turn the 
energies of the people towards economic develop- 
ment. The negro population in Africa has thus 
far lived in the presence of overwhelming natural 
phenomena, and in a constant state of fluidity 
which has allowed but very little of settled civili- 
zation and of national self-consciousness to grow 
up. The negroes have, however, developed a 
strong sense of individual justice, and it is justice 
that they require rather than the rarer gifts of 
benevolence. Now if justice has any definite 


meaning, it implies respect for the sphere of an 
individual existence. We certainly cannot be 
just to the African if we demolish all his native 
institutions, simply because we will not take the 
trouble to understand them. No cruelty of war, 
no suffering, will be resented by the Africans so 
much as an attack upon their private property, 
and unless the system of concessions to European 
companies is to prove a curse to Africa, it must 
respect scrupulously the native property rights. 
The European must also have a care not to break 
up farther such tribal and social unity as exists 
among the African populations. The basest 
manner of life exists among the jetsam and flot- 
sam of tribal populations along the African coast 
where the original unity has been dissolved by 
European interference. It is here that the mis- 
sions have their greatest work to do, by creating 
a new social unity and morality in place of that 
which has been so recklessly destroyed. 

We have seen that European interference may 
succeed in creating a new economic basis for 
African life. Whether it can do more, whether 
it can deeply and permanently influence African 
life in the direction of specifically European civ- 
ilization in its intellectual and moral aspects is 
more doubtful. The most potent civilizing 
agency at all times has been example, and in this 
respect the relations of the white to the negro 
race have been particularly unfortunate. The 
white men who have come to Africa have either 
been colonial officials, impatiently waiting for 



their next leave of absence, with little insight 
into the true needs of native society; or traders 
whose sole purpose was to get the wealth of the 
natives rapidly and for the cheapest possible 
return. The missionaries, men often of single- 
hearted devotion, have been too few to act as a 
leavening force upon the entire mass of the Afri- 
can negroes. Moreover, many of them have 
found it difficult to put their message into the 
form of greatest helpfulness to the African. 
Their example, too, aside from the few industrial 
schools which have been established, holds up 
the ideal of an intellectual and spiritual life rather 
than that of mechanical and industrial efficiency 
which the Africans so much need. In these re- 
spects the Islamitic races have the advantage. 
They come in contact with the Africans in large 
numbers as merchants, industrials, and rulers; 
and it is not unlikely that they will continue to 
exert a far greater personal influence upon the 
African race than will the Europeans. This is 
true also of the Hindus, who are settling in large 
numbers along the East Coast. The French 
seem of all European nations to be most success- 
ful in charming the African natives into civiliza- 
tion. Their missionaries work in large commu- 
nities, and are thus assisted by the experience of 
many societies operating for a long time. More- 
over, the French do not exhibit an excessive sense 
of race superiority over the negroes. They have 
therefore already exercised a distinctive civiliz- 
ing influence in their West African colonies. 



The classical example of a relation of mutual 
friendliness between the white race and the black 
is the life in the unhappy island of Martinique 
unhappy not only on account of cruel natural 
catastrophes but on account of the terrible force 
of atavism which, with the gradual departure of 
the white population, is dragging the charming 
race of the island back towards the dark supersti- 
tions of African life. It is remarkable that in 
countries like Martinique, Hayti, and the south- 
ern states of the Union 'the vices of the negro 
population assume more repulsive aspects than 
they bear in the African home. This is due no 
doubt to the fact that the original social unity 
has in these cases been destroyed. An African 
society, although it may have barbarous customs, 
still has a unified social character which preserves 
a certain individual morality and dignity of life. 
Liquor Legislation. Another subject of great 
importance in colonial administration is the pro- 
tection of natives against deleterious substances, 
such as liquors and opium. While in limited 
areas no special danger may accompany the intro- 
duction of spirituous liquors, the general experi- 
ence has been that it has a disastrous effect on the 
health and morals of the native races of the col- 
onies. The colonial governments have therefore 
attempted to restrict as far as possible the im- 
portation and sale of liquors. By the treaty of 
Brussels of 1890 it was agreed with respect to the 
Central African colonies 1 that in districts where, 

1 See page 112. 



on account of religious belief or from some other 
cause, the use of distilled liquors does not exist, 
the powers shall prohibit their importation. 
This treaty also called for a progressively in- 
creasing tax on distilled liquors to be levied for 
six years in all parts of the zone in which the 
above prohibition does not apply, as an experi- 
ment to determine the amount of a tax which 
would be prohibitory to the natives. As it was 
found that a tax of 52 cents a gallon would be 
prohibitory as far as the natives were concerned, 
another treaty was made in 1899, fixing the tax at 
this figure. In the Congo region, therefore, 
liquor may still be imported into the non-Moham- 
medan regions, but it is subject to a tax which 
only the small white population can afford to pay. 
It is the present policy of the British government 
also to impose a very heavy tax upon spirits im- 
ported into West Africa, for the reason, as stated 
by Mr. Chamberlain, that "it is the intention to 
discourage the drink habit, as it ultimately des- 
troys all trade by destroying the population." 
As northern Nigeria is a Mohammedan region, 
the importation of liquor into it is absolutely for- 
bidden. In southern Nigeria it may be sold, but 
a heavy license tax is imposed. In general, ar- 
rangements have been made in all African col- 
onies by which the sale of spirituous liquors to 
natives could be made impossible, were these con- 
ventions and laws everywhere enforced. 

Health and Sanitation. One of the most essen- 
tial requisites of social progress in the colonies is 



the improvement of the general sanitary condi- 
tion of the natives. Very much attention has 
recently been given to this subject. In England 
and France schools of tropical medicine have 
been founded, in which tropical diseases are care- 
fully studied, and experiments conducted in trop- 
ical sanitation and medicine. In the colonies 
themselves, as already stated, medical schools 
have been established in a considerable number. 
Very successful experiments have been made in 
the suppression of certain specific tropical dis- 
eases. Of the greatest importance in this con- 
nection has been the discovery of the malaria 
mosquito. Practical experiments in the destruc- 
tion of the insect have been made with splendid 
success in many parts of the tropics. In Cuba 
the death rate from malaria and yellow fever has 
been reduced to almost nothing. It is reported 
that similar success has been achieved in Egypt, 
along the Suez Canal, and in many African set- 
tlements. Should it be possible thoroughly to 
eradicate malaria and yellow fever, the entire 
problem of tropical colonization would assume a 
different aspect. Residence in the tropics would 
become far more safe for Europeans and would 
be undertaken by greater numbers of them ; and 
while perhaps the debilitating influence of the cli- 
mate would still prevent the development of a 
large permanent white population, the ranks of 
colonists and sojourners in the tropics would be 
increased to such an extent that the work of 
tropical development would receive an impetus 



exceeding all expectations hitherto conceived. 
The health service has also received much atten- 
tion in the colonies and dependencies. In India, 
vaccination is enforced generally among the 
people, as many as eight million successful vac- 
cinations being reported in a single year. The 
hospitals of India treat annually about twenty 
million persons in all, of whom 400,000 are indoor 
patients. It is impossible to conceive what an 
amount of suffering and mortality has been pre- 
vented by these institutions. Attempts have 
been made through the zenana mission to bring 
medical and surgical aid to the women of India, 
who, on account of racial and caste prejudices, 
have not thus far made use of the hospital facili- 
ties, and who are very much in need of an im- 
proved medical service. The zenana mission 
trains women in surgery and medicine, and pro- 
vides nurses and medical attendance. 

Barbarous Customs. A primitive social sys- 
tem will usually include institutions which to our 
mind are so barbarous that their continuance 
under the sovereignty of a Western nation seems 
impossible ; and while we must be careful before 
utterly condemning an institution which we do 
not thoroughly understand, there is really but 
little doubt that certain practices should be abol- 
ished as speedily as possible. No one, no matter 
how anxious to preserve native societies, will 
criticise the Indian government for suppressing 
suttee, infanticide, and thuggism. As a matter of 
fact, one of the greatest titles of the Indian gov- 



ernment to credit has been the introduction of the 
conception of law and order and the feeling of 
personal safety into India. The Indian criminal 
code is a masterpiece of legislation. It shows the 
rationalizing tendency at its best, because it rests 
upon a foundation of simple orderliness which 
would be beneficial in any stage of civilization. 
Africa, too, is greatly in need of a rational crim- 
inal code. Human leopard and alligator societies 
exercise a horrible tyranny over the individual, 
enforced by the barbarous poison test, which is 
the means of destroying multitudes of people. 
But though such practices ought to be speedily 
suppressed, we must, on the other hand, carefully 
take account of the social ideas of the natives and 
not confuse their sense of morality by making 
that criminal which cannot be so considered in a 
primitive society. The French with their forest 
regulations in Algeria and the Germans with a 
multitude of police rules in their African colonies 
have made some grave mistakes in this matter. 



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Colonial finance differs in some important re- 
spects from the finances of a fully developed 
nation. In the first place, a colony being a sub- 
ordinate though distinct part of the national or- 
ganism, its financial system must always be 
adapted to this relation of dependence. Col- 
onies, however, cannot be assimilated to the local 
units of a national government because of the 
great diversity of conditions which prevail in the 
various parts of a colonial empire. In colonies, 
moreover, financial questions are even more 
closely connected with the general economic life 
than in independent countries ; indeed, the more 
highly developed a country becomes, the more 
distinctly can finance be treated as a matter of 
revenue supply. In a new region where civiliza- 
tion is being built up painfully and in the face of 
formidable obstacles, there must be a careful cal- 
culation of the possible effect of any act of the 
government upon all the incipient economic insti- 
tutions and relations. Thus, for instance, in col- 
onies, the matter of direct taxation is intimately 
connected with the labor supply, customs duties 
control the development of trade, and the impor- 
6 & 


tance of the land tax involves the government in 
the prosperity or the misfortunes of the cultiva- 
tors of the soil. It is therefore not merely in its 
relation to the administrative system that we 
shall study colonial finance, but as an important 
instrumentality among the social forces engaged 
in the work of colonial development. 

The original expenses of acquisition should be 
kept down with jealous care, for they readily 
attain such a height as to make it very problemat- 
ical whether the first outlay can ever be recovered 
by the mother country even with a very favor- 
able development of trade. It is easy to discount 
the future too much and, in the hope of gaining 
large profits from the exploitation of the un- 
touched resources of the tropics, to incur a heavy 
initial expenditure. Though enormous wealth 
may potentially exist, the economic organization 
and the mechanism for its development must first 
be created at an expense which is itself large 
enough to constitute a serious obstacle. If to 
this is added an unduly heavy military expendi- 
ture, the colonizing government may be driven 
to encourage a quick exploitation of the natural 
resources and thus a policy not at all favorable to 
the growth of a normal civilization may be intro- 

Contributions by the mother country. The 
different colonizing countries follow widely di- 
vergent policies with regard to the financial rela- 
tions between the mother country and the colo- 
nies. Some countries estimate the prospective 


profits of colonial enterprise so highly and are 
filled with so generous a feeling toward the dis- 
tant dependencies of the national empire that 
they are ready to spend liberal amounts in an 
effort to assist the colonies in their growth and 
progress. Other governments have looked upon 
their colonial possessions as constituting a rich 
estate from which large profits should accrue to 
the owner. Their entire energy has therefore 
been bent upon rendering their colonial posses- 
sions profitable either by creating in them a 
highly organized system of state agriculture, as 
in Java, or by exploiting the natural wealth in a 
reckless fashion, as in the earlier Spanish colo- 
nies and in the Congo Free State. 

Midway between these two policies of colonial 
administration, Great Britain has held her course, 
acting on the principle that after the first cost of 
acquisition, the colonial establishments should 
support themselves; that they should neither 
rely upon the mother country for constant assist- 
ance nor be subject to levies of tribute. Great 
Britain therefore has always had a very small 
colonial budget, nor has she ever enriched her 
national treasury by direct contributions from 
her dependencies. More recently she has de- 
parted from this principle in exceptional cases; 
thus, India has for some time been made to bear 
a heavy burden of taxation for the purpose of 
paying the cost of imperial policies. 

The practice of making direct grants in aid to 
colonial treasuries was recently begun by Great 



Britain in order to mitigate the chronic distress 
of the West Indies. Ever since the exceptional 
prosperity of the West Indian sugar industry 
disappeared, these colonies have severely felt the 
lack of the necessary capital for general economic 
development, and for a long time they have actu- 
ally been on the verge of bankruptcy. In 1898 
the British Parliament voted grants amounting 
to 174,500 to a number of the smaller islands in 
the West Indies, for the purpose of direct relief 
to the treasuries, for the construction of roads, 
and for the establishment of agricultural experi- 
ment stations. In 1900, a subsidy of 40,000 a 
year was granted to a steamship line which is 
carrying on the fruit trade between the West 
Indies and Great Britain ; this subsidy is paid in 
equal shares by Great Britain and by Jamaica. 
A corollary to the grant of aid was the assump- 
tion by the Colonial Office of a more direct con- 
trol over the legislative councils in these islands, 
upon the principle as announced by Mr. Cham- 
berlain, that "when financial assistance is given 
to a colony by the imperial government the lat- 
ter must have control over the finances." Shortly 
after these direct grants had been made, a system 
of imperial loans to weak colonies was estab- 
lished which will be discussed later on. On ac- 
count of these and other similar grants, the Brit- 
ish budget of colonial expenditure has risen very 
rapidly in the last few years. The largest in- 
crease in the expenses occurred in the year 1902 
and is due principally to the grant of 2,550,000 



voted for the purpose of rehabilitating the con- 
quered colonies in South Africa. In the same 
year 250,000 was voted as an additional grant 
to the sugar industries in the West Indies. The 
Uganda railway has also for several years been 
a source of heavy expenditure to the imperial 
government ; this is, however, looked upon rather 
as a loan to be repaid gradually as the develop- 
ment of the railway may permit. 

France has pursued an exceedingly liberal pol- 
icy toward her colonial possessions. This is due 
to a certain extent to the fact that after she had 
lost her splendid prospects in North America and 
India, she conceived a special fondness for the 
few small possessions that remained to her. 
Martinique, Guadeloupe, and Reunion were at 
that time greatly cherished by the mother coun- 
try, and the generosity with which they were 
always treated has in a measure been transferred 
to the possessions acquired later. It is only in 
the last few years that the French government 
has begun to look upon financial relations with 
the colonies in a more businesslike manner and 
has set up the requirement that the colonies 
should be self-supporting, a mandate which most 
of them are still far from complying with. The 
growth of the French colonial budget in the last 
half century has kept pace with the territorial 
growth of the colonial empire. 1 

'The figures of the colonial budget are as follows: 

1850 Fr. 13,465,314 

1870 Fr. 26,563,122 

1890 Fr. 68,682,412 

85 (Over) 


The principles of colonial finance which have 
recently come to prevail in France are embodied 
in the Law of Finance of 1900, which provides 
that all civil and police expenses shall be borne 
by the budgets of the individual colonies, that the 
state may assist the colonies by special subven- 
tions, and that the colonies may be required to 
furnish contributions up to the amount of the 
military expenses incurred in their behalf by the 
mother country. This law is an attempt to es- 
tablish the principle of colonial self-support. 
The state no longer assumes any expenses except 
those of military protection, and even these may 
be partly or entirely apportioned among the col- 
onies. The older practice under which the ex- 
penses of sovereignty fell in part to the mother 
country is therefore abandoned in this legislation. 
It has of course been impossible to put the vari- 
ous colonies on a basis of self-support immedi- 
ately. The subventions voted to the French 
colonies in 1903 for the purpose of meeting civil 
expenses still amounted to more than 7,000,000 
francs. The large deficit of the Algerian admin- 
istration (about 75,000,000 francs a year, for mili- 
tary and extraordinary disbursements) must also 
be met by the mother country, and constitutes the 

1903 Fr. 1 12,546,832 

The French colonial budget does not comprise all expenditures 
incurred for the colonies, e. g. f Algerian and Tunisian mili- 
tary expenses, pensions, marine subsidies, etc. Many of these 
expenses cannot be exactly apportioned between the mother 
country and the colonies. But those which clearly fall within 
the class of colonial expenditure, amounted to 198,000,000 
francs in 1905. 



largest single item of colonial expenditure. 
Under the most favorable conditions it will take 
several decades before France will be able to re- 
duce her colonial budget to the expenses of the 
central colonial administration in France, which, 
according to the plan of the law of 1900 should 
alone fall upon the mother country. 

Germany has at present relatively the most 
expensive colonial possessions. Only one of her 
dependencies (Togo) has reached the stage of 
being self-supporting and the disproportion be- 
tween expenses and revenue in some of them is 
almost unprecedented in colonial experience. In 
the budget of 1903 a colonial revenue of only 
9,350,000 marks was set over against an imperial 
subvention of 27,388,800 marks. Of the total 
expenditure, 11,393,000 marks were spent for ex- 
traordinary works, while the current administra- 
tion called for 25,216,000 marks; the colonies 
therefore paid less than two-fifths of their ordi- 
nary running expenses. The largest part of the 
deficit was due to public works then under con- 
struction at Kiaochau. The income of this col- 
ony or station in 1902 was only 363,000 marks, 
while its expenditure ran up to 12,588,000 marks. 
The budget for 1905 shows a revenue of 15,636,- 
ooo marks, but the subsidy has risen to the enor- 
mous amount of 75,928,000 marks, largely on 
account of the native insurrection in S. W. Africa. 
Were it not for this military expenditure, the 
subsidy would only be 29,286,000 marks, so that 
there is some improvement in the general finan- 



cial condition of the German colonies. While in 
1896 the colonies paid only a trifle over one-fourth 
of their regular expenses, in 1904 they paid nearly 

Contributions by the colonies. Though Great 
Britain has never looked upon her colonies as a 
source of direct income to the national treasury, 
the British government is beginning to feel that 
most of the colonies are strong enough to con- 
tribute toward the naval and military expenses 
of the empire. It was expected that the Colonial 
Conference of 1902 would produce a consensus 
of colonial opinion in this matter, but the discus- 
sions on that occasion showed that, while the col- 
onies are lavish in their expressions of loyalty 
and while they are undoubtedly willing to furnish 
aid in an emergency, they are not ready to adopt 
a fixed scheme of military contributions. The 
technical difficulty of apportioning such contri- 
butions among the colonies also stands in the 
way of the achievement of a satisfactory plan. 
Three bases of apportionment have been sug- 
gested: (a) the territorial extent of the individ- 
ual colonies, which is plainly not a suitable cri- 
terion, as it would place on Canada twice the bur- 
den imposed upon India ; (b) population, to which 
a similar objection may be urged on account of the 
burden which it would lay upon small but densely 
populated states of the empire; (c) the volume 
of commerce. The latter the sum total of im- 
port and export trade is by some considered the 
fairest criterion, as it constitutes an index of the 


individual energy and capacity of a state, and also 
because the expense in question is incurred pri- 
marily for the protection of this very trade. 
Still, upon this basis, such colonies as Hongkong 
and the Straits Settlements would be called upon 
to contribute an excessive share, and a special ar- 
rangement would certainly have to be made in 
their case. Moreover, it is urged that it would 
not be good policy to fine a colony for its devel- 
opment of commerce and that from the point of 
view of the industries of the mother country such 
a course would be especially objectionable. At 
the present time, therefore, the matter of colonial 
contributions to imperial defense is still in a de- 
cidedly unsettled condition. 1 Special arrange- 
ments have been made with individual colonies 
whereby they make contributions towards the 
expense of the navy and army. The military ex- 
penditure of the Indian Empire is far beyond the 
local needs and may therefore in large part be 
looked upon as a direct contribution for imperial 
purposes. It is indeed a matter of frequent criti- 
cism that the British Empire has imposed such a 
large part of her military expenses upon a poor 
country like India. In 1904 the total military 
expenditure of India amounted to 18,000,000, 
of which the sum of 5,600,000 was spent in 
Great Britain for such purposes as enlistment and 

*The matter is to be taken up again by the Conference of 
1906. Recently, the gross amount of revenue has been sug- 
gested as a basis for apportionment of contributions, but strenu- 
ous objection is made by Australia, whose income from rail- 
ways forms a large part of her revenue. 



pensions. It is perhaps fairly correct to estimate 
that at least one-third of the total expenditure, or 
6,000,000, is incurred for purely imperial pur- 
poses. 1 

The French colonies are legally liable to be 
called upon to pay into the treasury of the mother 
country financial aids called either contingents 
or contributions. The right of the home govern- 
ment to call for contingents to help in meeting 
the expenses of sovereignty was created by the 
Senatus-Consulte of 1866, and the colonial budgets 
from that time down have contained contingents 
of moderate amounts. The only colony, how- 
ever, whose contingents have arisen to a consid- 
erable sum is Indo-China; the amount paid by 
this dependency was nearly 5,000,000 francs in 
1898, and in 1905 it had reached the respectable 
sum of 13,000,000 francs. The Law of Finance 
of 1893, which aimed at making the colonies more 
nearly self-supporting, provided that contribu- 
tions could be asked for without reference to the 
expenses of sovereignty, for any purpose of the 
government. The tendency at present is to use 
the above two terms interchangeably, with a pref- 
erence for the term "contributions." 

The balance sheets of Dutch East Indian 
finance during the nineteenth century tell a very 

1 Arrangements have been made with a number of the crown 
colonies for contributions toward the expenses of imperial de- 
fense. Thus Hongkong contributes 20 per cent, of her rev- 
enue, provided that her contribution shall not exceed the cost 
of the local garrison. Ceylon since 1897 pays g*6 per cent, 
of her revenue, the Straits Settlements 17^ per cent., and 
Mauritius 7 l /2 per cent. 



unusual story. In fact, among the present co- 
lonial powers Holland alone has drawn a large 
direct contribution from her colonial possessions. 
During the period of greatest financial prosperity 
in Dutch East India when the culture system was 
in full operation, from the years 1831 to 1875 m ~ 
elusive, the colony paid into the treasury of the 
mother country the vast sum of 844,000,000 flor- 
ins ($337,600,000), which has aided very materi- 
ally in reducing the public debt of the Nether- 
lands, the heritage of a long series of European 
wars. 1 The first serious deficits made their ap- 
pearance in 1877, occasioned by the Atchin War 
in Sumatra, which has not yet completely come 
to a conclusion. In the years from 1885 to 1890, 
the colonial finances were again somewhat more 
prosperous, but in the period from 1891 to 1901 
the sum total of the deficits ran up to 81,000,000 
florins. The military expenses continued very 
high all through this period and constituted over 
one-third of the total expenditure for a number 
of years. The budget of 1902 shows a deficit of 
7,542,000 florins, that of 1903 an even larger deficit 
of 12,034,341 florins. These shortages, however, 
while paid by the mother country, are charged to 
the colonial budget and are ultimately to be re- 
paid by the colony which also has to meet the 
interest account. In 1902 the Dutch East Indies 
paid towards the sinking fund and interest on the 
debt the sum of 3,860,000 florins. 

1 The total income acquired from Dutch East India from 
1831 to 1893 amounted to 908,000,000 florins or about $363,- 



Colonial Systems of Taxation. In the discus- 
sion of colonial taxation systems, we shall give 
but little attention to the self-governing colonies 
of Great Britain ; for in these practically indepen- 
dent states, peopled by the descendants of Euro- 
pean settlers, taxation problems assume in gen- 
eral the same aspect which they bear in European 
and American countries. In tropical colonies 
and dependencies, however, financial questions 
must be approached from an entirely different 
point of view. Governments there are dealing 
with populations unaccustomed to taxation or 
bound to a financial system too inflexible for the 
needs of modern economic development. In bar- 
barian communities the system of taxation re- 
solves itself ordinarily into the confiscation by 
the ruler of all the products of industry which are 
not absolutely necessary to provide a bare living 
for the cultivators of the soil and for the handi- 
craftsmen. The moneyed classes are under bar- 
barian rule allowed to exist on condition that 
they will from time to time submit to the process 
of forced loans in favor of the royal exchequer. 
Such in general outline was the system to which 
the states of India had become accustomed 
through the practice of centuries before the Brit- 
ish conquest. That it obstructs all opportunity 
of social progress, that it discourages the accu- 
mulation of the economic surplus necessary for 
the work of civilization, is clearly apparent. A 
civilizing system of colonial finance must first of 
all try to solve the problem how taxation can be 



made productive of wealth through the encour- 
agement of industry and of profitable public 
works and improvements. 

In a country unprovided with the mechanism 
of modern industrial and political life it is a very 
easy matter to spend over half the proceeds of a 
tax in the process of collection; flexibility and 
inexpensiveness of the methods of collection are 
therefore' prime desiderata. For this reason, in- 
direct taxes are in general more advantageous 
in colonial administration than are direct imposts. 
Direct taxation presupposes the individualistic 
citizen who fully understands the necessity of 
taxation and, willing to contribute his share, pre- 
fers to know how much he is actually called upon 
to pay in order that he may keep a firmer control 
over the matter of public expenditure. Among 
more primitive populations, however, such polit- 
ical individualism has not as yet been developed. 
Moreover tangible property is often not present 
in a sufficient abundance to offer a basis for a 
direct revenue system, so that the individual is not 
easily reached except through indirect imposts. 
On the other hand, it must not be forgotten how 
easily an indirect tax, such as the various imposts 
on consumption may become a dangerous burden, 
and how the industrial future of the colony may 
be compromised through charges which rest as a 
heavy weight upon the trade of the community. 

The committee of the American Economic As- 
sociation which was appointed in 1900 for the 
purpose of studying the finances of the principal 



colonial powers and colonies, has summarized the 
conclusions of its investigations as follows : 

First. The finances of each colony should be managed 
exclusively for the sake of the colony and for its develop- 
ment, and not for the advantage of the mother country. 

Second. No uniform system of detailed fiscal manage- 
ment for a number of colonies in different parts of the 
world can be established. Each colony must be considered 
by itself and its system must be adapted to its conditions. 

Third. Each colony should, as far as possible, be made 
self-supporting; but the mother country may well sustain 
the colony's credit or make advances to be repaid at a later 

Fourth. In undeveloped colonies whose inhabitants are 
not capable of managing important public works, such as 
railways, canals, telegraph systems, etc., these improve- 
ments may well be owned by the government and managed 
by government officials rather than by private companies. 

Fifth. The selection of sources of revenue must in each 
case be determined in accordance with the economic and 
social conditions of the colony. 

Sixth. Where the colony is so situated that the develop- 
ment of trade with foreign countries is the chief economic 
consideration, import duties should be very low or prac- 
tically non-existent. 

Seventh. In colonies of undeveloped economic re- 
sources the chief reliance for general government income 
should be on a system of internal revenue taxes with com- 
pensatory duties on articles imported. Excise duties should 
be levied primarily on a few articles of general consump- 
tion, like alcoholic drinks, opium and rice. When any 
colony has decided advantages in the production of some 
specially favored commodities, like sugar, tobacco, hemp, 
etc., it may be desirable to impose business licenses or 
similar duties on them. It is even a question whether low 
export duties on such commodities may not be advan- 
tageously employed in exceptional cases. 

Eighth. It is undesirable to utilize an octroi or a system 


of consumption taxes for local purposes. Local revenue 
should in most cases be derived in a large measure from 
real estate, business licenses, and kindred specific taxes. 

The substance of this opinion is that in consid- 
eration of the low economic development of col- 
onies the use of indirect taxes for the general 
purposes of the colonial budget is advisable. 
Direct taxes are better adapted to the purposes 
of local government. To a limited amount im- 
port duties also may be used ; they should, how- 
ever, be kept at a moderate figure in order not to 
retard the growth of colonial commerce. The 
recommendations of the committee are based 
chiefly upon the experience of British colonies. 
M. Leroy-Beaulieu, in his well-known treatise on 
colonization, does not reach the same conclusions 
as the American committee. Though he also 
favors a system of moderate import duties free 
from the protective element, he lays special stress 
upon revenue derived from the sale of public 
lands; nor does he reject the octroi de mer. 1 
Nearly all authorities upon colonial finance are 
agreed that export duties, which have so long 
been placed under the ban by the economic sci- 
ence of Europe and America, can be used to great 
advantage in colonial finance. 

Customs duties. Of all financial questions in 
colonial administration that of the proper system 
of customs duties is the most important. The 
effort to develop colonial trade by means of cus- 
toms tariffs, as well as the specific trade relations 

1 See page 103. 



of the mother country to the colony, will be taken 
up later in the chapter on Colonial Commerce. 
In this place we desire merely to investigate what 
are the actual methods pursued with respect to 
this branch of taxation and what relation customs 
duties bear to other forms of colonial revenue. 

The percentage of the revenue derived from 
customs duties to the total income from taxation, 
according to the most recent statistics, is lowest 
in India (4.7 per cent.), in Java (8 per cent.), and 
in the French colonies (15 per cent.) ; while it is 
much higher in the British self-governing 
colonies (31 per cent.), and highest in the British 
tropical crown colonies (38 per cent.). These 
figures are not to be taken to imply that the rate 
of customs duties in the British crown colonies 
is the highest. On the contrary the rate is much 
higher in most of the French dependencies as well 
as in the British self-governing colonies. The 
percentages show simply what share of the 
colonial income is derived from this form of indi- 
rect taxation and they indicate its great impor- 
tance in the British colonies. They also impli- 
edly show how much the commerce of the French 
colonies with outside countries is suffering 
through the policy of high customs duties, since, 
although the rates of taxation are much higher 
than in the English colonies, the actual revenue 
from this source is relatively so unimportant in 
the French colonies. The complete exemption 
of French imports from taxation in most of the 



colonies also has the effect unduly to reduce the 
income from customs duties. 

The customs duties in British India are very 
low. Import duties were entirely abolished in 
1882, but on account of the crying financial needs 
of the government they were reimposed in 1894. 
The prevailing rate of duty is five per cent., but 
iron and steel pay only one per cent., and machin- 
ery is free. Cotton yarns and fabrics were for a 
time exempt from duties, but in 1894 a duty of five 
per cent, was imposed on them, counterbalanced 
by an excise on cotton goods manufactured in 
India. In 1896 this tariff was revised so as to 
make all yarns free and to impose a duty of three 
and one-half per cent, on woven goods, counter- 
balanced by an excise of the same amount. The 
policy of the Indian government concerning duties 
on cotton goods has been much criticised as sub- 
ordinating the evident needs of Indian industry to 
the interests of British manufacturers. It is cer- 
tain that with a very slight fiscal advantage the 
cotton industry of India would experience a re- 
markable advance and many native leaders urge 
that it is due to the industries of India that they 
should be given at least the advantage of the small 
revenue duty upon cotton goods without having it 
neutralized by the excise. The exceedingly low 
general range of import duties in India has also 
not escaped criticism. Many articles, especially 
those consumed by the wealthier classes, could 
bear a much larger import duty without any spe- 
cial disadvantage to commerce. In this way the 

7 97 


burdens of taxation which rest so heavily upon the 
shoulders of the Indian peasant population could 
be somewhat lightened and distributed more in 
accordance with the ability to pay. As we have 
seen, only 4.7 per cent, of the entire revenue of 
India is derived from customs duties. 1 That 
source of revenue which in unadvanced countries 
is usually the principal reliance of the govern- 
ment, is therefore utilized to a very limited extent 
in the case of India, out of deference to the inter- 
ests of the commercial class and of the British 
manufacturers. The general system is easily de- 
fended as in keeping with the free trade practice 
of England ; but this is a case in which the direct 
advantage of free trade methods to the British 
industrials and merchants can be demonstrated 
as clearly as the fact that the system entails a 
drawback to the industries and the general eco- 
nomic life of the dependent country. The pro- 
ducing classes of India would certainly welcome 
the imposition of somewhat higher duties upon 
the things which India is able to manufacture. 
Still it would be unfair to blame the British nation 
for carrying through, in the case of India, the sys- 
tem of free trade upon which the entire fabric of 
its commerce rests. 

In the crown colonies of Great Britain, which 
are completely under the control of the Colonial 
Office, the customs tariff is generally placed upon 
a revenue basis, the rates scarcely ever exceeding 

*In 1903-4 the import duties produced about 3,900,000, of 
which 640,000 were derived from duties on cotton. 



10 per cent., except in the West Indies. Not- 
withstanding the low rates, the customs duties 
constitute the principal source of revenue in these 
dependencies. In 1900, out of a total sum of 
7,927,000 of revenue raised in the principal 
crown colonies, ,3,058,000 was collected in the 
form of customs duties. 1 Hongkong and the 
Straits Settlements, however, have absolute 
free trade, without even the lowest revenue tariff. 
This is due to the fact that these two colonies are 
the principal depots of oriental trade, and it is 
therefore considered inadvisable to hamper their 
commerce in any manner, no matter by how slight 
a duty. 2 

The colonies of France are divided into two 
groups. In the first of these the rates of the 
French customs tariff are levied upon merchan- 
dise imported from other countries than France. 
This system was instituted by the law of Janu- 
ary n, 1892. The effort to assimilate the cus- 
toms policy of the French colonies at this time 
was due partly to the fact that some of the inde- 
pendent general councils had seen fit to impose 

a ln Jamaica the ratio of the proceeds of customs duties to 
the total of taxation is 45 per cent. ; the duties are levied prin- 
cipally on foodstuffs, such as wheat and rice, and average 17 
per cent. In the other West Indian colonies customs duties 
are also the principal source of revenue, and in most cases the 
ratio is even higher than in the case of Jamaica. 

8 In Ceylon, customs duties are the principal source of rev- 
enue, the largest amount being derived from duties on grain. 
Manufactured goods are taxed on the same scale as they are 
in India. In the British colonies of tropical Africa the tariff 
rates have been kept strictly upon a revenue basis, never ex- 
ceeding 10 per cent, for ordinary manufactured articles. 



considerable burdens upon French commerce, so 
that it seemed advisable in the interests of the 
latter to increase the French colonial tariffs and 
to take from the general councils the power to fix 
the rate of import duties. Another reason for 
this legislation is to be found in the fact that the 
free trade sentiment which had dominated eco- 
nomic thought for several decades was growing 
weak and that the European nations were begin- 
ning to look upon their colonial domain as a 
proper field for the more exclusive development 
of their national trade and industry. It was 
therefore deemed advisable to place in the hands 
of the metropolitan parliament the power to wield 
the instrument of a customs tariff throughout the 
colonial empire. 

The colonies embraced by this legislation are 
the following: Martinique, Guadeloupe, Reunion, 
French Guiana, Saint Pierre and Miquelon, 
Gaboon, New Caledonia, Indo-China, and Mada- 
gascar (since 1897). Imports from foreign coun- 
tries into these colonies pay in general the rate of 
the French tariff, although minor modifications 
have been made in individual cases on account of 
the local circumstances of the colony. French 
imports are free from duties. 1 The principal 
products of these colonies, such as coffee, tea, 
cocoa, pepper, and spices, when imported into 
France, pay one-half of the rates imposed by the 
metropolitan tariff ; sugar from the colonies pays 
the regular tariff rate with a rebate (detaxe de dis- 

1 They pay the octroi, and in Gaboon a slight customs duty. 


tance) of 2.25 to 2.50 fr. per 100 kilog. Raw cot- 
ton, jute, wool, mahogany, india rubber, gutta 
percha, hides and skins, ivory, and all ores, are on 
the general free list. The preference accorded to 
the colonies of France over other regions is there- 
fore not equal to that enjoyed by I rench goods in 
the colonial markets, and larger advantages are 
persistently claimed by the dependencies. The 
colony or province of Algeria, while not comprised 
in the legislation of 1892, has a system similar to 
that of the assimilated colonies. The rates of the 
French tariff are enforced against foreign im- 
ports, but there is a complete reciprocity of free 
trade between France and the dependency, in 
keeping with the latter's position as a department 
of France. 

From a fiscal point of view the policy of high 
customs duties in the colonies with a complete 
exemption in favor of imports from the mother 
country is a grave mistake, as it deprives the 
treasury of young colonies of a much needed in- 
come, which could be best secured through a light 
customs duty on all imports. If a preference is 
to be accorded the imports from the mother coun- 
try, they should at least bear a moderate revenue 
duty, outside of the octroi. 

The second group of French colonies is made 
up of those dependencies in which, on account of 
local conditions or of international agreements, 1 

a Such as the Congo Act of 1885, aad the Anglo-French 
Agreement of 1898. According to the terms of the latter, 
British goods receive the same treatment as French imports in 
Dahomey and the Ivory Coast for thirty years. 



France has not imposed the rates of her metro- 
politan tariff. The group comprises Senegal, 
French Guinea, the Ivory Coast, Dahomey, 
French Congo (as far as situated in the Conven- 
tional Congo Basin), Tahiti and the other French 
islands of Oceanica, Somaliland, and several 
minor dependencies. Senegal and French Guinea 
levy a low revenue duty upon foreign imports. 
All imports entering the other West African col- 
onies and French Congo, whether from France or 
from foreign countries, are subject to the same 
low rates. This customs duty is therefore tech- 
nically not called douane, but a consumption tax, 
because the term douane refers to a tax imposed 
only on the products of foreign countries. 1 The 
products of the colonies in this second list when 
entered in France pay the rates of the French 
tariff. By decree, however, a certain number of 
such colonial products have been admitted to fa- 
vorable treatment. Thus coffee from the West 
African colonies and vanilla from Tahiti are sub- 
ject to only one-half of the regular tariff rates; 
while bananas from Guinea and palm oil from 
West Africa are entirely exempt. 

The protectorate of Tunis is under a special 
tariff regime. Imports of agricultural products 
from Tunis into France are free only if sent in 
French ships and up to a limited quantity, fixed 
by decree for every year. Whenever this limit 
is exceeded, other imports during the year in 

1 The Court of Cassation has, however, recently refused to 
accept this distinction. See Dislere, III, 195. 



question must pay the regular French tariff rates. 
Most French imports now enter Tunis free, while 
all foreign goods pay a protective duty. 1 While 
France has not fully applied her system of com- 
mercial assimilation to Tunis, the present arrange- 
ment favors French imports at the cost of those 
from other countries and gives Tunis a certain 
reciprocal advantage in the French customs sys- 

There is levied in many of the French colonies 
a tax similar to the import duties, yet differing 
from them materially in nature and practice the 
octroi de mer. This is a consumption tax collected 
on the imports of a colony, for the benefit of all 
the communes within its territory. It differs 
from the ordinary municipal octroi in the fact that* 
the latter is levied only upon articles of local con- 
sumption within narrow limits, whereas the octroi 
de mer strikes the objects of consumption which 
pass through any of the ports of the colony. 
Moreover, the municipal octroi is levied for the 
benefit of the commune where collected, while the 
proceeds of the octroi de mer are divided among 
all communes in the colony by the administration. 
The municipal tax strikes chiefly articles of food 
and drink, while the list of the objects embraced 
by the octroi de mer may also include general 
manufactures and raw materials. This impost is 
levied upon merchandise irrespective of the coun- 
try of its origin; goods coming from France 

1 By special treaty British cotton goods cannot be taxed more 
than five per cent, up to 1912. 



therefore pay the same octroi de mer as those im- 
ported from foreign countries. This fact for- 
merly led some of the colonies with general 
councils to establish a system distinctly unfavor- 
able to the mother country. They lowered the 
general duties which were paid by foreign imports 
and raised the rates of the octroi de mer, which fell 
alike upon all merchandise imported into the col- 
ony. The power of the general councils to create 
a system thus unfavorable to France was taken 
away by the law of January II, 1892. The gen- 
eral import duties are now fixed by the French 
government, and while the rate of the octroi de 
mer is still determined, in the first instance, by 
the general councils wherever such exist, it re- 
quires the approval of the colonial minister. The 
octroi de mer can thus no longer be used in the 
manner of a general import duty; the rates at 
present are low and the tax is levied distinctly 
for the purpose for which it was inaugurated. 

The Congo Free State and the adjoining colo- 
nies are under international restrictions with 
regard to customs legislation. The Berlin Gen- 
eral Act of 1885 established in the center of Africa 
a free trade zone which embraces the following 
colonies: that part of French Congo which is 
watered by tributaries of the Congo River, that 
is, practically all of French Congo except the col- 
ony of Gaboon; the whole of the Congo Free 
State; the portion of Portuguese West Africa 
lying north of the Loje River; the northernmost 
part of Rhodesia; the whole of the British Cen- 



tral African Protectorate ; the part of Portuguese 
East Africa lying north of the Zambesi River; 
German and British East Africa, and Italian 
Somaliland, south of the fifth degree of north lati- 
tude. The zone thus extends from a point in the 
eighth degree of north latitude to a point in the 
thirteenth degree of south latitude, and in general 
embraces the natural basin of the Congo with its 
tributaries, the great Central African lakes, and 
the country lying between them and the Indian 
Ocean. The general act of Berlin provides that 
throughout "the basin of the Congo, its mouth 
and the circumjacent regions, the trade of all the 
nations shall enjoy complete freedom;" that, 
"merchandise of whatever origin, imported into 
these regions, under whatsoever flag, whether by 
sea, by river, or overland, shall be subject to no 
other taxes than such as may be levied as fair 
compensation for expenditure in the interest of 
trade, and these taxes for that reason must be 
equally borne by the people themselves and by 
foreigners of all nationalities, all differential dues 
on vessels, as well as on merchandise, being for- 
bidden;" furthermore that "merchandise im- 
ported into these regions shall be free from entry 
and transit dues, the Powers reserving to them- 
selves the right of deciding, after the lapse of 
twenty years, whether the freedom of import 
shall be retained or not." In the Brussels Con- 
ference of 1890, which was called avowedly for 
the purpose of devising means for suppressing 
the slave trade and slavery in Africa, very strong 



influence was brought to bear to modify the free 
trade provisions of the Berlin act. As a result 
the conference passed a Supplementary Declara- 
tion, which enabled the Powers having posses- 
sions or protectorates in the region of the Congo 
to establish duties on imported goods, the scale 
of which is not to exceed the rate of ten per cent, 
ad valorem, always excepting spirits and liquors, 
for which special arrangements were made. As 
a reason for this enactment it was urged that the 
suppression of the slave trade and the improve- 
ment of the moral conditions of the natives were 
imposing burdens upon the colonial powers in the 
Congo Basin which they could not meet with the 
existing financial resources of the colonies. The 
principle of free trade was not theoretically weak- 
ened by the Supplementary Declaration, as the 
dues to be levied are treated as a revenue tax and 
are in no way designed to give protection to in- 
dustry in the respective colony or its mother 
country; moreover they are required to be levied 
impartially upon all merchandise no matter what 
may be its source. 

The tariff duties in German colonies are in gen- 
eral upon the revenue basis. They range from 
one and a half to twenty per cent, ad valorem, and 
in no case has the principle of protection or pref- 
erence been invoked in the matter of fixing the 
rate of taxation. In the Dutch East Indies the 
tariff was also put on a revenue basis in 1874; 
until 1886 the general rate of duties was six per 
cent., after which it was raised to ten per cent. 



The principal articles upon which duties are 
levied are textiles and spirits. The products of 
Holland do not enjoy the privilege of discriminat- 
ing duties in the Dutch possessions. 

The tariff system of the American dependency 
of Porto Rico has been assimilated to that of the 
United States. The rates of the United States 
tariff are enforced against all imports from foreign 
countries into the colony. In the Philippine 
Islands the revised tariff of 1891 was continued in 
force until 1901. This tariff had introduced the 
principle that Spanish goods imported in Spanish 
ships should be free from customs duties, it had 
increased the protective rates, and had practically 
abolished the free list. In 1901 a new tariff pre- 
pared by the Philippine Commission took the 
place of the Spanish legislation. Under the 
treaty with Spain no exclusive favor can be 
accorded the products of the United States for 
ten years. Nevertheless strong pressure was 
brought to bear upon the government of the 
United States to induce it to arrange the tariff 
in a manner favorable to the American producers, 
and the draft of the tariff law was submitted to 
prominent American industrials interested in the 
export trade to the Philippine Islands for their 
suggestions and approval. The Philippine tariff 
of 1901 (Laws of the United States Philippine 
Commission, Act No. 230) in general lowered the 
rate of duties, as compared with the tariff of 1891, 
by about one-fourth, the average rate being re- 
duced from 24 to 18 per cent. The products upon 



which the rates were reduced most radically are 
wheat (from 47 to 25 cents per hundred kilos), 
flour, canned fruits, canned meats, lard and 
canned salmon. Although until 1909 the tariff 
must treat all nations alike, still the American 
importer may be favored by lowering the duties 
on those articles which the United States can 
most readily and easily supply. 1 

Export duties. As already intimated export 
duties constitute a class of taxation which has 
long been in disfavor among economists. Under 
the special conditions found in the tropical col- 
onies, however, this nearly discarded method of 
taxation is again coming into use. It is consid- 
ered especially advisable in the case of articles of 
which there is but a limited supply, such as ivory 
and rubber. The tax, it is argued, will be added 
to the price of an article which the outside world 
is in great need of; thus it will be paid by the 
foreign purchaser and not by the inhabitants of 
the colony. Besides providing much-needed 
funds for the colonial treasuries, the export duty 

1 The Philippine Tariff was revised by Congress in 1905, the 
bill for this purpose having been drafted by the Philippine 
Commission and the War Department. The practice of fa- 
voring American goods through classification was continued. 
For the sake of revenue, the rate of taxation was increased on 
lumber, mineral waters, and rice ; but it was decreased by one- 
half on furniture and porcelain and lowered to five per cent, 
on machinery. Imports from the Philippine Islands to the 
United States pay 75 per cent, of the rates of the American 
tariff. The proceeds are turned over to the Philippine treas- 
ury. On account of the obstruction to Philippine commerce 
due to this tax, the Philippine Commission has repeatedly 
urged Congress to lower or abolish the duties upon Philippine 
imports into the United States. 



incidentally protects the valuable supplies of nat- 
ural wealth by raising the price and thus to a cer- 
tain extent checking the consumption. An ex- 
port duty may also be used for the purpose of 
creating a differential advantage in favor of the 
trade between the mother country and the colony. 
Thus through the remission of the export duties 
on hemp shipped from the Philippine Islands to 
the United States the current of general Philip- 
pine trade is being turned toward the United 
States to the disadvantage of the other competing 
powers. Another novel use of export duties is 
the protection of industries within a colony. In 
1903, the government of the Malay Federated 
States imposed an export duty of $30 per picul on 
all crude tin ore exported from the States, thus 
practically requiring that all ore should be 
smelted in the colony. The duty is intended to 
meet the machinations of a powerful syndicate of 
capitalists who are trying to draw the tin ore out 
of the Federated States in order to build up a 
smelting industry in some other country. The 
various uses of the export duties outlined above 
open up a long vista of possibilities in the way of 
differential rates of protection and of preferences 
to the mother country, and indicate the probable 
complexity of colonial commercial relations in 
the future. 

In India an export duty of 2^2 rupees per 100 
pounds is levied on rice, which produces about 
600,000 annually, and is maintained chiefly on 
account of its productivity. In the Federated 



Malay States an export duty of 10 to 15 per cent, 
ad valorem is levied on tin; this is the regular 
tax, to which the special duty recently imposed 
and mentioned above must be added. In Ceylon 
there are export duties upon plumbago, cinchona, 
and several other local products; the tax upon 
plumbago equals about 25 cents per hundred- 
weight, and it constitutes the most important 
single item in the revenue derived from this 
source. In the African colonies an export duty 
is usually levied upon rubber and ivory. Thus 
in Rhodesia the duty of four pence per pound is 
levied upon rubber and nine pence per pound on 
ivory. The system of export duties is not used 
in Jamaica and in the other British West Indies. 
In the French colonies export duties are also 
used quite generally as a regular part of the rev- 
enue system. In the French West Indies such 
duties are levied on sugar, coffee, cocoa, and other 
tropical products. In the French sugar produ- 
cing colonies the rate of export taxation has been 
an important political question during the last 
few decades; the general councils, representing 
the colored majority, repeatedly raised the export 
duty and thus imposed a considerable burden 
upon the principal manufacturing industry of the 
colonies. In the French African colonies, export 
duties constitute a very important part of the 
colonial revenue system. In Guinea an export 
duty of 7 per cent, ad valorem is levied upon gen- 
eral colonial products, while a duty is in many 
colonies imposed upon rubber and ivory. In 



that portion of French Congo which belongs 
to the conventional Congo Basin, as well as in the 
other colonies which form a part of this region, 
the export duties were fixed by the Lisbon Con- 
vention of 1892, at 10 per cent, ad valorem on 
ivory and rubber and five per cent, on other trop- 
ical products. In Indo-China an export duty is 
levied upon rice, fish, silk, and other products; 
and Madagascar has an export duty on cattle, 
which is imposed for the purpose of discouraging 
excessive exportation. 

In the German colonies, with the exception of 
Kamerun, export duties are high, and the pro- 
ceeds therefrom figure prominently in the colonial 
revenue. The principal objects of taxation are 
rubber, ivory, skins, copal, cattle, guano, cotton, 
and copra. In the Dutch East Indies the rate of 
export duties has constantly been diminished, 
and there has been a tendency to restrict this 
form of taxation more and more. In 1886 the 
suggestion to abolish the export duties upon 
colonial products when exported to the Nether- 
lands was refused by a decisive vote in the Dutch 
parliament. At present the income from this 
source of taxation is about 2,000,000 florins. The 
export duty on sugar was abolished in 1898; but 
duties are still levied upon coffee, tobacco, tin, 
indigo, and forest products. 

In the Philippine Islands the following are the 
principal export duties levied, per hundred kilos : 
hemp 75 cents, indigo 25 cents, rice $1.00, and 
tobacco 75 cents to $1.50, according to the prov- 



ince of origin. The returns from this form of 
taxation for the fiscal year 1902 were $884,500, or 
ten per cent, of the total insular revenue. The ex- 
port duty, as has been stated, is remitted upon all 
hemp imported from the Philippine Islands into 
the United States. This provision has already 
had a marked effect upon the current of hemp 
trade. In the short period from 1900 to 1902 the 
value of hemp exported to the United States rose 
from $5,000,000 to over $10,000,000; and in 1903 
it advanced further to $11,300,000. This increase 
is partly to be accounted for by the fact that hemp 
formerly imported into the United States by way 
of Great Britain is now shipped directly, in order 
to profit by the rebate. 

Consumption Taxes. In the matter of con- 
sumption taxes, considerations other than fiscal 
are very important, such as the protection of the 
native population against the vices of drink and 
gambling, or the confinement of these and other 
vices to a certain part of the population among 
whom their suppression may not be feasible. 
The general act of the Brussels Conference of 
1890 rendered the taxation of spirituous liquors 
obligatory in the tropical African dependencies. 
According to the terms of this act, the colonies 
lying between the twentieth degree of north lat- 
itude and the twenty-second degree of south lati- 
tude, must have a tax upon liquors of not less than 
fifteen francs per hectoliter. By the Brussels 
Convention of 1899, the rate was raised to sev- 
enty francs per hectoliter (50 cents per gallon) of 



liquor containing fifty per cent, of alcohol. The 
rate is increased for the higher grades. 

In the British colonies the excise forms an im- 
portant part of the taxation system. The Indian 
excise upon spirits shows a remarkable increase 
in the last thirty years. While in 1870 it brought 
in Rx 1,250,000, in 1904 the income from this 
source had risen to Rx 7,500,000. As the general 
abstinence of the people of India has not been 
impaired during this period, the increased pro- 
ductivity of the tax is due very largely to im- 
proved administration and to the suppression of 
illicit sales. One of the most important sources of 
Indian revenue is the salt tax. Throughout Ori- 
ental countries where the populations have few 
wants and are not easily reached by taxation a 
duty upon an article necessary even to the poorest 
people becomes an important means of furnish- 
ing revenue. In India a salt tax of two rupees 
per maund (about four-fifths cents per pound) is 
levied, being just about equivalent to an average 
tax of ten cents annually per head of the popula- 
tion. It brings in over 77,000,000 rupees, and 
constitutes 10 per cent, of the revenue from taxes. 1 
It has often been urged that this tax should be 
abolished on account of the poverty of the Indian 
population, but the Indian government insists 
that as no poll tax is levied in India the salt tax 
constitutes the only means by which the entire 
population can be reached, and that it cannot be 

1 In some of the interior provinces of India the government 
maintains a monopoly of the sale of salt, for fiscal purposes. 

8 "3 


asked to give up so important a source of revenue. 
Yet in 1903 a decrease of the tax was rendered 
necessary by the fact that even this apparently 
light form of taxation led to an underconsump- 
tion of salt to such a degree as to endanger the 
public health. 1 

In the Straits Settlements there exists a most 
interesting system of excise duties. As we have 
seen, this colony avoids all taxation of commerce. 
It gains its principal revenue by taxing the vices 
of the Chinese, and for the sake of efficient ad- 
ministration uses the system of farming out to 
Chinamen, the privilege of selling opium and 
spirituous . liquors and of keeping pawnbroking 
shops. In the Federated Malay States there is 
in addition to the above, a system of farming out 
the right to keep gambling houses. The impor- 
tation of opium is very strictly regulated. Only 
a certain amount is permitted to be imported and 
it can be sold only by the persons who have a 
government license. The price and the amount 
to be sold at wholesale or retail, as well as the 
quality of the opium are stricly regulated by the 
government. Similar regulations are made in 
connection with the sale of spirits, and with re- 
spect to pawnshops and gambling houses. The 
system, which has been much criticised, is de- 
fended on the grounds that the government must 
enlist the support of the Chinese for the collec- 


1 The reduction of the rate of the salt tax led to such an in- 
crease in consumption as to cause the revenue from this source 
to be actually augmented. 



tion of the revenues accruing to the state from 
these privileges, because otherwise a highly ex- 
pensive system of espionage and control would 
be needed. By the sale of the right to manufac- 
ture and retail opium, to sell spirits, and to keep 
pawnshops and gambling houses, the government 
is enabled to maintain a strict control since the 
farmers can be held responsible. These, on the 
other hand, will be prompted by their own inter- 
ests to prevent illicit trading and will be careful 
to observe the government regulations in order 
not to forfeit their privileges. The relation of 
the farming system to government monopolies 
we shall take up later on. 

The excise tax forms an important part of the 
revenue system of Porto Rico. The government 
of Porto Rico encountered the problem of reform- 
ing the oppressive and confused system of con- 
sumption taxes of the Spanish regime. The sys- 
tem which has been established comprises taxes 
upon distilled spirits of all kinds, fermented 
wines, champagne, .cigars, cigarettes, tobacco, 
playing cards, oleomargarine, matches, arms and 
ammunition. There is further a system of 
licenses for wholesale and retail dealers in spirits, 
cigars, and tobacco, as well as in arms and ammu- 
nition, with fees varying from $4.00 to $80.00 per 
year. The third part of the Porto Rican excise 
system consists of stamp duties upon bills of lad- 
ing, custom house entries, and notarial instru- 
ments. All these taxes are paid by the affixing 
of internal revenue stamps. The proceeds of the 


excise tax are divided between the general and 
the local treasuries. Under the Spanish regime 
sixty per cent, of the consumption taxes were 
levied upon ordinary articles of food. The essen- 
tial principle of the American system has been 
to place them upon luxuries and to free the 
articles of ordinary consumption as well as the 
general commercial pursuits from the weight of 
local taxation. According to the latest estimates 
35 per cent, of the total revenue of the islands 
will be furnished by the excise duties. The gov- 
ernment believes that the larger portion of these 
taxes has been shifted from the consumer to the 
retail dealer. 

In the Philippine Islands a very elaborate sys- 
tem of internal revenue was adopted in 1904 (Act 
No. 1,189), based largely upon the experience of 
our government in the United States and in Porto 
Rico. It is, however, the most sweeping meas- 
ure of taxation ever devised for a dependency, 
and it also includes a tax on business and occupa- 
tions. On the side of excise taxes the law com- 
prises fixed license taxes for the manufacture and 
sale of distilled or fermented liquors, cigars, cig- 
arettes, and tobacco; as well as taxes on these 
products and on matches and lumber, determined 
according to the amount, for instance, 20 cen- 
tavos on each liter of proof spirits. Stamp taxes 
are imposed on practically all transactions in 
which writing is required; stamps must be 
affixed to stock certificates and transfers, checks 
and drafts, insurance policies, bonds, notes, re- 



ceipts, certificates, bills of lading, passage tickets, 
proxies, leases, agreements, deeds, mortgages, 
charter parties, etc. The government has cer- 
tainly been successful in discovering all possible 
objects of taxation; it remains to be seen what 
effect this measure will have on the business of 
the islands, which has additional burdens to bear 
in the form of industrial taxes. The proceeds of 
the internal revenue, with trifling exceptions, go 
to the insular treasury, which, however, pays ten 
per cent, to the provincial and fifteen per cent, 
to the municipal governments, the amounts being 
apportioned according to population. 

Fiscal Monopolies. Though fiscal monopolies 
are practically a method of collecting consump- 
tion taxes, they involve an entirely unique admin- 
istrative organization. Very often fiscal monop- 
olies make use of tax farming, and the system of 
farming may be looked upon as a qualified form 
of the monopoly. A true fiscal monopoly, how- 
ever, occurs only where the state itself engages 
in the business of manufacture, or of wholesale 
and retail trade in any product or commodity. 

In British India the opium monopoly consti- 
tutes an exceedingly important source of revenue, 
bringing in 70,000,000 rupees a year. The culti- 
vation of the poppy is permitted only in parts of 
Bengal and of Agra, except in certain small areas 
for local consumption. The cultivator is re- 
quired to deliver his whole crop to the govern- 
ment agents at a fixed price. The opium is pre- 
pared for market in government factories, and is 


then sold at auction in Calcutta, for export to 
China and other Oriental countries. The opium 
monopoly was inherited by the British govern- 
ment from the East India Company. As it 
constituted so valuable a fiscal resource, and as it 
also had in its favor the humanitarian argument 
of preventing the spread of the use of opium in 
India, the government adopted it as a permanent 
part of the Indian fiscal policy. 

In the Dutch East Indies there also exists a 
monopoly of opium. In this case, however, it is 
a monopoly of the wholesale trade. Home pro- 
duction and private importation of opium are 
prohibited, and the entire supply of opium is pro- 
cured by the government, chiefly from British 
India. The privilege of retailing the opium is 
farmed out to the highest bidder. The govern- 
ment experienced very great difficulty in trying 
to prevent illicit trade in opium, and it therefore 
established a system called the tiban and siram. 
The amount which any region is likely to use 
(tiban) is carefully estimated by government offi- 
cials; the local opium farmer is then obliged to 
buy an amount equivalent to this, and is fur- 
nished with whatever he may need in excess 
(siram) at cost, up to the maximum established 
by law. The purpose of the system is to prevent 
smuggling; the farmer being required to buy a 
certain amount of the government and then hav- 
ing the opportunity to get more at a low price, 
has no incentive to buy of illicit traders. It 
would seem that the system would encourage the 



excessive use of opium, as the surplus can be ob- 
tained at a low figure, but in fact the maximum 
allowed by the government is rarely reached. 
The system thus outlined has nevertheless not 
proved entirely satisfactory in its effect on the 
people; therefore, beginning with 1893, experi- 
ments have been made in carrying on the retail 
sale under government administration (regie). 
In several of the provinces of Java this system 
has already been introduced, definite regulations 
have been made by law in 1898, and it is now very 
probable that governmental administration will 
gradually supersede the system of farming. The 
administration of the system in the old form is 
very inexpensive and almost the entire income 
may be counted as net revenue. In 1902 the 
opium monopoly brought in 19,000,000 florins. 
In the Dutch East Indies the privilege of keeping 
pawnshops and gambling houses is also farmed 
out to private individuals, usually to Chinamen. 
The combination of pawnshop, gambling house, 
and opium den in the hands of Chinamen, has not 
been found at all desirable, although the govern- 
ment regulations have succeeded in preventing 
the worst abuses. Salt is also the subject of a 
government monopoly in the Dutch East Indies. 
It is both manufactured and sold by govern- 
mental agencies. As in British India, the salt 
revenue is regarded as taking the place of a capi- 
tation tax, and is therefore maintained as the best 
means of reaching the entire mass of the popula- 



tion. The income from the salt monopoly in 1905 
was 11,900,000 florins. 

Indo-China has recently established a very in- 
teresting system of government monopolies. Up 
to 1897 the taxes upon opium and liquors and 
the general indirect contributions were farmed 
out, except in the colony of Cochin-China, where 
the abolition of the system of tax farming began 
in 1882. The business of tax farming was almost 
entirely in the hands of the Chinese and the 
abuses of the system were exceedingly great. 
Local notables were bribed by the Chinese agents, 
and opium and liquor were sold to the natives on 
credit at ruinous rates of interest, with the result 
that large numbers among the natives were dis- 
possessed and forced into poverty. Moreover, 
the net revenue realized by the government was 
relatively small. Since 1897 the administration 
of these taxes has been gradually taken over by 
the government as a regie, and the trade in opium 
and in salt has been turned into a government 
monopoly. The opium is purchased from British 
India and Yunnan in about equal parts. It is 
manufactured in government factories and is then 
sold through government agents and through 
private dealers, which latter are permitted to 
make a profit of 10 per cent, upon their sales. 
The danger from contraband trade is the most 
serious defect of the system and the strictest kind 
of regulation is necessary to prevent illicit im- 
portation. The French have chosen a system 
opposite to that in use in the Straits Settlements, 



because they found the private tax farmers 
utterly unscrupulous and because they anticipated 
large returns to the colonial treasury under the 
new arrangement. In the latter respect they 
have been gratified, notwithstanding the difficul- 
ties that have been encountered. The govern- 
ment income from opium has risen from 3,900,000 
piasters (= Mexican dollars) in 1896 to 7,000,000 
piasters in 1902. The sale of salt has also been 
turned into a government monopoly. The ad- 
ministration buys the salt from various producers 
and sells it from government magazines at a fixed 
rate, which includes a tax of four centimes a kilo. 
When the government depots were first created 
in 1898 the natives were reluctant to purchase 
from them on account of the report spread by 
native dealers that the government salt was in- 
ferior in quality and unhealthful; but the lower 
price and the excellent quality of the salt very 
soon drew the general current of trade toward 
the government magazines. The system of 
farming was replaced by the system of direct 
regie within the short space of two years. The 
total income from the so-called grand regies in 
Indo-China (opium, liquors, and salt) rose from 
5,500,000 piasters in 1896 to 14,820,000 piasters 
in 1902. This is certainly a testimonial of great 
administrative success, when it is considered that 
the actual burden upon the population was not 
increased by the changes that have been intro- 

In Tunis there are several government monop- 


olies in tobacco, gunpowder, and salt. The 
total income of the state from these sources in 
1903 was 7,935,000 francs, the largest share of 
which is derived from the tobacco monopoly. 
The cultivation of tobacco is permitted only in 
certain localities, and the entire crop must be 
delivered to the agents of the state administration 
at a fixed price. 

The Japanese government in Formosa has 
recently established fiscal monopolies in opium, 
salt, and camphor. The opium monopoly has 
been established not for the purpose of gain- 
ing revenue from the vices of the Chinese, as in 
the case of Singapore, but for bringing about the 
gradual suppression of opium smoking. It has 
been decided to abolish the practice by degrees. 
Newly to commence opium smoking is entirely 
forbidden, total abstention being required from 
all who have not already formed the habit. The 
revenue obtained from the opium monopoly is 
about $2,000,000 a year. The monopolies of salt 
and of camphor are intended to become perma- 
nent parts of the fiscal system. Camphor is one 
of the most valuable products of Formosa, which 
practically furnishes the entire supply of the 
world. The government monopoly was estab- 
lished for the purpose of improving the methods 
of production and placing the industry upon a 
scientific basis. Heretofore only the crudest proc- 
esses of procuring and manufacturing the cam- 
phor had been employed by the natives. Under 
a scientific system, the supply will be increased 



and a vast improvement may be achieved in the 
quality of the product as brought into the market. 
The annual yield of the camphor monopoly is also 
in the neighborhood of $2,000,000. 

Direct Taxes. We have seen how important 
a part is played by indirect taxes in any system of 
colonial finance. In some dependencies, such as 
the Straits Settlements and the West African 
colonies, the fiscal system is based almost entirely 
upon this source of revenue. It is indeed a ques- 
tion whether it is at all wise to introduce the 
machinery of direct taxation into colonies with 
meager or undeveloped natural resources. The 
collection of direct taxes is expensive in a society 
living in primitive economic conditions, and it 
can be carried on effectively only where the 
authority of government is firmly established and 
recognized throughout a dependency. The im- 
position of direct taxes is apt to irritate the pop- 
ulation, especially in Africa, where they are not 
accustomed to levies of this kind. To plead the 
educational effect of direct taxes seems an as- 
sumption of too high a development of the polit- 
ical side of native life, when we consider how 
unpalatable this form of taxation is even for the 
most advanced nations. Some of the forms of 
direct taxation common among Western nations, 
such as the inheritance tax, the income and the 
general property tax, are not extensively em- 
ployed in colonial finance. There are, however, 
three forms of direct taxation which are of gen- 



eral importance in colonies the hut tax, the land 
tax, and the capitation tax. 

The Hut Tax. Hut taxes have been intro- 
duced into the European colonies in Africa 
because the huts of the natives form the only 
available objects of direct taxation. The great 
popularity of the tax with the administration of 
South Africa is due to the fact that the tax is 
there used for the purpose of increasing the sup- 
ply of native labor. The tax rate has, therefore, 
been placed at a very high figure in South Africa, 
reaching 14 shillings per hut in Natal and l in 
Basutoland. The attempt to introduce this sys- 
tem into the West African colony of Sierra Leone 
led to unfortunate consequences. When in June, 
1896, the British protectorate over the hinterland 
of Sierra Leone was declared, it was at the same 
time announced that the waste lands were to be 
administered and distributed by the government 
of Sierra Leone. This part of the ordinance was 
very unfavorably received by the natives, and 
when it was followed by the levy of a hut tax of 
5 shillings a year upon smaller and 10 shillings 
upon larger huts the opposition of the natives 
took the form of armed resistance. The tax was 
to be collected by the chiefs through the head- 
men, who were to receive a moderate commission. 
The tax could be paid in kind, and villages of 
fewer than twenty huts were to be exempted 
when at a great distance from places where em- 
ployment could be had. The natives looked upon 
this tax as a step toward confiscation and not 



being accustomed to the payment of compulsory 
taxes, their contributions heretofore having been 
voluntary and irregular, they opposed the collec- 
tion of the tax by force of arms. They were, 
however, put down and the colony was gradually 
pacified. The Colonial Office, contrary to the 
advice of the commissioner sent to investigate 
the matter, decided to retain the hut tax as a per- 
manent form of revenue. While the imposition 
of a moderate hut tax may in general seem expedi- 
ent, both as a fiscal measure and as a means of 
accustoming the natives to a settled form of tax- 
ation, there can be no doubt that the manner in 
which this kind of taxation has been used by the 
British in West Africa is far from being just and 
statesmanlike. There has been a woeful lack of 
consideration for native customs and ideas; the 
taxes were imposed without any preparation and 
entirely against the feeling of justice among the 
natives ; and the collection has been in many 
cases oppressive. Consequently the policy has 
not even succeeded as a fiscal measure, since the 
expenses of collection are enormously high. 1 

The Indian Land Revenue. The most impor- 
tant and interesting system of land revenue is 

1 The tax has also been introduced into some of the French 
colonies where it has been used with greater success. In 
French Congo the government levies 3 francs upon huts and 
6 francs upon houses built of planks and provided with a ve- 
randa. The natives are allowed to pay the tax in the produce 
of the region and they may also arrange to pay by installments. 
A tax of two francs is levied in Madagascar and in Somali- 
land. In German East Africa the hut tax is one of the most 
important sources of revenue, yielding in 1902 over one mil- 
lion marks. 



that of India. Throughout the Orient the state 
claims the ultimate right of property in the soil ; 
the natives hold their land of the government as 
of a landlord, 1 and the payment made to the state 
is therefore technically considered not a tax but 
a rent. In India we speak of the land revenue, in 
Java of the land rent, but the term land tax is not 
used in either case. The amount of land revenue 
paid by landholders in British India to the gov- 
ernment is fixed either by a permanent or by a 
temporary settlement. The principal permanent 
settlement is that made in Bengal by Lord Corn- 
wallis in 1793. Other permanently settled rev- 
enue districts are found in Agra and in Madras. 
In these districts the demand of the state has been 
rendered fixed and unalterable. In Bengal the 
revenue is collected by the government from the 
zemindars, who before the Permanent Settlement 
were tax gatherers or local nobles. The settle- 
ment legislation gave them the position of land- 
lords and made them personally responsible for 
the payment of the revenue from the lands under 
their control. The government does not at pres- 
ent favor the extension of the permanent settle- 
ment system, because it is believed that the state 
should share in the advance of the value of the 
land in which, according to the principles of Ori- 
ental policy, it has a proprietary interest. As a 
matter of fact the zemindars of Bengal, the rich- 
est province of India, pay an altogether inade- 

1 See chapter on the Land Policy. 


quate land tax, under the rates established by the 
settlement of over a century ago. 

The lands subject to temporary settlement are 
of two kinds, the zemindari and the ryotwari 
lands. The zemindari, or landlord, tenure pre- 
vails in the Central Provinces, Agra, Oudh, and 
the Panjab. The share of the state in the rev- 
enue of these lands was originally very large. 
The Mogul government fixed its share by esti- 
mating the rents paid by the tenants, deducting 
therefrom the cost of collection, and allowing the 
zemindars one-eleventh as their commission; it, 
therefore, appropriated ten-elevenths of the net 
revenue or "assets" of the land as the share of the 
state. This rate has not been adhered to by the 
British government, but was reduced gradually 
until the principle was laid down in 1885, in the 
Saharanpur Rules, that in fixing the share of the 
state the collector will bear in mind that about 
one-half of the net "assets" should be the govern- 
ment's share. Even this rate has, however, not 
been enforced to the full; and it may be said in 
general that the government's share under the 
settlements at present in force is less than one- 
half of the net revenue. In the province of Agra 
prospective income is excluded from considera- 
tion, and allowance is made for poor crops and 
for improvements made by the landlord; the 
average is thus brought to less than 50 per cent, 
of the "assets." In the Central Provinces the 
share of the state was originally 75 per cent. as 
under the Maratha government but here too 



there has been a progressive reduction in the rate 
of assessments. In the Panjab the general aver- 
age does not exceed 45 per cent. 

The ryotwari settlements are found in those 
parts of the country where peasant proprietorship 
is the prevailing form of tenure, that is, in the 
provinces of Madras, Bombay, Burma and Assam. 
Here also 50 per cent, of the value of the net 
produce after the deduction of the cultivation 
expenses is the formal standard of the rate ex- 
acted by the government. This, however, is 
hardly anywhere enforced to the full. The ques- 
tion has arisen what part of the gross revenue 
would form the proper equivalent of this stan- 
dard. It had been claimed by the critics of the 
Indian government that one-fifth of the gross 
revenue constitutes such an equivalent and that 
this should not be exceeded in the collections 
under ryotwari settlements. The Indian govern- 
ment in its reply has shown that the assessments 
hardly ever have reached one-fifth of the gross 
produce. Liberal reductions have been made on 
account of unprofitable cultivation, distance from 
markets, and other drawbacks, so that the theo- 
retical measure of assessment of one-half the net 
produce is scarcely ever completely enforced. 
The process of reassessment of the lands for the 
purpose of making new settlements is naturally 
the cause of considerable agitation and apprehen- 
sion to the native. After he has been enjoying 
the unearned increment of the land for many 
years, to have it suddenly taken from him is not 



an agreeable prospect. The policy of the govern- 
ment, however, is to adhere to the principle that 
it has a proprietor's share in the increased value 
of the lands, which is ascertained and claimed for 
it by revising the settlements from time to time. 
Usually the period for which temporary settle- 
ments are made is thirty years, with twenty years 
in the Panjab and in some other parts of India 
where conditions of cultivation change rapidly. 
The improvements made by the tenants, such as 
wells and irrigation canals, are exempted in the 

In addition to the land revenue there is imposed 
upon Indian lands a tax for local purposes, such 
as road building, forestry, and education, which 
is called a cess. It is levied upon the rate of rev- 
enue paid to the government, and varies from 4 
per cent, to 14 per cent, of the revenue charge; 
so that a tenant paying a land tax of, let us say, 
32 rupees, will, in addition, be subject to a local 
cess of between one and four rupees. 

That the burden of taxation upon the Indian 
land-holding class is heavy cannot be denied; 
many critics of the Indian situation have gone so 
far as to lay the frequency and violence of fam- 
ines directly to the exhaustion of the resources 
of the Indian cultivators through excessive taxa- 
tion. The government, however, does not admit 
that a reduction in the amount of taxation would 
materially improve the condition of the peasant 
class. Nevertheless it attempts to make the tax- 
ation more flexible by exempting from the rev- 


enue charge lands which are, on account of 
climatic conditions, temporarily unproductive. 
This system has not as yet been fully worked out. 
Thus far reductions are allowed only on irrigable 
lands which have not produced a crop on account 
of the failure of the water supply. Non-irrigated 
lands, if left unsown, are exempted from assess- 
ment only in Burma and Assam, but in general 
lands which are dependent upon the natural rain- 
fall pay a fixed assessment irrespective of their 
produce. A general system of exempting lands 
for a shortage of crops does not recommend itself 
to the Indian government, though it is ready to 
allow communities of peasant cultivators a reduc- 
tion when a material shortage is clearly proved. 
Such reduction is then distributed among the 
individual proprietors. The policy of the Indian 
government with respect to the land revenue 
comprises, therefore, "first, progressive and 
gradual imposition of large enhancements of 
the assessment upon revision; second, a greater 
elasticity in revenue collection, facilitating its 
adjustment to the variations of the seasons, and 
to the circumstances of the people ; third, a more 
general resort to reduction of assessments in 
cases of local deterioration, where such reduction 
cannot be claimed under the terms of the settle- 
ment." 1 

Land Tax in Egypt. In Egypt the land tax 
has always been the principal source of public 

*Land Revenue Policy of the Indian Government, page 47. 


revenue. 1 Since 1890, the Egyptian government 
has followed the policy of diminishing the direct, 
and increasing the indirect, taxes in order to 
secure a more even distribution of taxation. The 
tobacco tax has therefore been materially raised 
and at the present time about three-eighths of the 
total revenue is obtained by means of indirect, 
five-eighths by means of direct taxes. A careful 
cadastral survey of the Egyptian lands is at pres- 
ent in progress and the administration is attempt- 
ing to equalize the land tax in its operation. The 
standard upon which land taxes are levied is 30 
per cent, of the net revenue or rental value of the 
land. Although this standard is somewhat lower 
than in India, it is lived up to more closely than 
is the Indian standard of one-half of the net rev- 
enue. The land tax weighs rather heavily upon 
the peasant proprietors, causing them to resort to 
forms of exhaustive cultivation, such as sugar 
and cotton culture. As only irrigated lands can 
be used for agricultural purposes and therefore 
they alone pay taxes, the connection between 
irrigation and the public revenue is very direct 
in Egypt. Through the great public irrigation 
works which have been constructed since the 
beginning of the British occupation, the area of 
taxable lands has been increased by one-third. 
The present complete solvency of the Egyptian 

1 Since the British occupation the tax rate has been reduced 
from 22S. to 1 8s. ad. per acre. The amount produced by the 
land tax in 1902 was 4,661,300 (the Egyptian equals 



treasury is due almost entirely to this increase 
of the basis of taxable property. 

In the Federated Malay States a land tax has 
been introduced which is based rather upon the 
European and American model than upon the 
land revenue system of India. The tax is com- 
paratively light, amounting to from 20 to 40 cents 
per acre, and $1.00 to $2.00 for building lots in 
towns. In Jamaica there is no unified land tax 
but a number of different "rates" are levied on 
the real property. The principal of these rates 
are the quit rent or acreage tax, the holdings tax, 
which is graded according to the number of acres 
held in one estate, and the house tax. The in- 
come derived from the various forms of land taxes 
in Jamaica is about one-fifth of the total revenue. 
In other British tropical colonies the land tax is 
either entirely absent or is an unimportant source 
of public income. 

The Javan Land Rente. In Java the land tax 
varies according to the nature of the tenure by 
which the land is held. The private holdings 
which were alienated by the government to Euro- 
peans early in the nineteenth century, pay the 
comparatively low tax of three-fourths of one per 
cent, on the cash value of the property, which is 
assumed to be ten times the annual rental value. 
The lands which, under the law of 1872, have 
been leased out in inheritance tenure (erfpacht 
or emphyteusis) for a period usually of seventy- 
five years, pay a land tax of from one to five flor- 
ins per bouw (about 1.7 acres). The most im- 



portant source of the Javanese revenue, however, 
is the lease tenure of the native peasants. Like 
other Oriental governments that of Java consid- 
ers itself the ultimate owner of all lands under its 
administration. It therefore shares in the rev- 
enue derived from the land. The land tax (land 
rente) in its present form was introduced by Sir 
Stamford Raffles during the brief period of Brit- 
ish rule. He was decidedly opposed to the 
corvee then in use and desired to put a rational 
system of taxation in its place. During the 
earlier years the amount of the land tax was fixed 
in the case of each village through consultation 
of the local officials with the village elders. By 
the law of 1872, it was attempted to render the 
system more definite and to give a certain amount 
of fixity to the assessments. The villages were 
divided into ten classes according to the average 
fertility of their lands. 1 According to the law, 
assessments were to be made every five years; 
but as this term proved too short it was enacted 
in 1878 (statute No. no) that the valuation of the 
year 1877 was to be retained permanently, subject 

1 The lowest class contains those villages whose lands pro- 
duce a return of from ten to twenty florins per bouw. In the 
higher classes the amount increases by ten florins for each 
class, the highest therefore showing an average fertility of a 
hundred florins, or over, per bouw. The land tax was to be 
one-fifth of the lowest value in the class to which the village 
belongs. Thus a desa, or village, with 200 bouws of land 
yielding 26 florins per bouw, would be assessed by multiplying 
the number of bouws, 200 by 21, the lowest average yield of 
the class to which the village belongs. One-fifth of this 
amount, or 840 florins, would constitute the tax imposed upon 
this village. 



to the power of the resident with the consent of 
the governor-general to revise the assessment in 
any particular case. Such liberal use was made 
of this power of revision that the system became 
even less fixed than before 1878, and the general 
indefiniteness and uncertainty of assessments 
was looked upon as a great hardship. Accord- 
ingly in 1889 the assessment of that year was 
made binding for four years, and again in 1895 
the assessment then in force was continued until 

The defects of the system as it has been in prac- 
tical operation during the last half of the nine- 
teenth century are apparent on the surface. The 
assessments are not fixed according to any gen- 
eral principles or by any precise methods, but are 
still largely the result of negotiations between 
the officials and the villagers. The tax is assessed 
upon villages rather than upon individual tenants, 
because the former are the units of Javanese 
political and social life. The fact that the gross 
product rather than the net revenue is taken as a 
basis of computation must be criticised, as this 
method imposes too heavy a burden upon the 
natives if consistently carried out. Moreover, 
the net revenue furnishes a far juster indication 
of what the tenant is really able to pay. During 
the past years the Javan government has under- 
taken a complete cadastral survey of the land. 
As this work progresses, the basis of assessment 
becomes more and more definite, and a system 
may therefore gradually be introduced similar to 



that used in British India, with longer assessment 
periods and more stability in the amount of the 
land revenue. 

Land Taxes in Algeria. In Algeria there exists 
no general land tax leviable upon the holdings of 
of French colonists, although it is apparent that 
such a tax would be most just and is also very 
necessary for the satisfactory development of the 
administration. There exists, however, a tax on 
buildings, introduced in 1884, the proceeds of 
which were originally used for local purposes ; 
but since 1892 they have also in part been em- 
ployed in the work of the general administration. 
The tax at the present time brings in 2,000,000 
francs. With respect to the Algerian natives, their 
original forms of taxation have been retained. The 
principal impost is the achour, a tax on the culti- 
vated area computed per charrue (ten hectares on 
the average.) The amount of this tax is com- 
puted annually, and varies with the degree of 
agricultural prosperity. In the province of Con- 
stantine, however, the tax is fixed at twenty-five 
francs per charrue. In this province an additional 
tax, the hockor, is levied upon the communal 
estates called arch. The total revenue from the 
achour is over 6,000,000 francs, while the hockor 
brings in upwards of 1,000,000 francs. Consider- 
ing the comparatively limited extent of the lands 
cultivated by natives in Algeria, these taxes are 
a heavy burden upon the native population, 
especially as they are not set off by any similar 
tax imposed upon European colonists. 



The protectorate of Tunis has a very unique 
system of taxation of agricultural produce and 
land. The fchanoun is a fixed tax imposed upon 
olive and date trees. The achour here takes the 
form of a tax upon cereal crops ; it was originally 
paid in kind but has now been converted into a 
money impost. It is interesting to note in this 
connection that the cultivators who use ploughs 
of French manufacture pay only one-tenth of this 
tax; by this means it is attempted to educate the 
natives to the use of better utensils, with an eye 
to a little incidental advantage to French manu- 
facturers. The third important land tax, the 
caroube, is an impost of 6.25 per cent, upon the 
rental value of lands ; this tax is used almost en- 
tirely for communal purposes. Several other 
less important forms of land taxation exist in 
Tunis, which render the system exceedingly com- 
plex; they all go back to the time before the 
French protectorate but their administration has 
been greatly modified under the influence of the 
French government. The entire system of 
Tunisian finance is, however, in need of simplifi- 
cation and of reform in the matter of the incidence 
of taxation. 1 

In the Philippine Islands the land tax has come 
into use since the American occupation as a regu- 
lar source of municipal revenue. The rate of the 
tax is 2 per cent, of the assessed value in the city 
of Manila, and one-half per cent, in the other 

1 Indo-China ha? no land tax. In Madagascar a tax is 
levied on rice lands. 



municipalities. The employment of a portion of 
the revenue from this tax for school purposes is 
compulsory upon the municipal councils; the 
remainder is applied to other purposes of local 
government. Under the Spanish regime the land 
tax was used merely as a supplementary and 
extraordinary source of revenue. In Porto Rico 
the Hollander law has established a general prop- 
erty tax consisting of a levy of one-half per cent, 
upon the actual value of real and personal prop- 
erty. Very elaborate regulations have been 
made with respect to the assessment and revision 
of this tax, the revenue derived from which is 
applied to local purposes. This system is 
founded upon the American general property tax, 
and is the only instance in colonial administra- 
tion where personal and real property are grouped 
together and made a direct basis of taxation. 

Capitation Taxes. The capitation tax is an 
important source of revenue in many colonies, 
though it cannot be used to advantage in colonies 
having a large savage population because of the 
difficulties in the way of a census and collection. 

The capitation tax is not used in British India, 
except in Burma ; in this province the thathemeda, 
an old form of taxation, has been continued under 
the British regime. This tax is levied upon the 
villages according to the number of heads of fam- 
ilies in each and is then divided among all the 
householders according to their ability to pay. 
The average payment amounts to ten rupees 
($3.20) per household. The proceeds of the tax 



are used entirely for purposes of local adminis- 

In Indo-China the head tax is employed to 
secure a revenue for purposes of local govern- 
ment. Each one of the colonies comprised under 
the government of Indo-China has its own sys- 
tem, but they all levy a capitation tax on adult 
males under the age of sixty years; the amount 
of the tax varies according to the age of the per- 
son paying it. The governments of Indo-China 
levy a special tax upon Asiatic foreigners resident 
in the colony, with the purpose of restricting 
Chinese immigration. 1 'In Madagascar the gen- 
eral capitation tax levied upon male natives is 
fixed at 10, 15, or 20 francs according to the prov- 
ince, and at 30 francs for the city of Tananarivo. 
Unmarried men pay an additional tax of 7.50 or 
15 francs according to their age. In the French 
West African colonies capitation taxes, ranging 
from 1.25 to 5 francs, are levied upon all adult 
natives, in some of the colonies without distinc- 
tion of sex. 2 

In the Transvaal a very high capitation tax is 
levied upon natives, with the purpose of inducing 
them to seek remunerative employment. By a 

1 In Cochin-China the Asiatic foreigners are divided into six 
classes, paying annually from ten to four hundred piasters per 
person according to the amount of the business and land taxes 
paid by the respective class. In Anam and Tongking there 
are five classes paying from 1.50 to 88 piasters as capitation 

a The capitation tax produces the largest amount in Mada- 
gascar (n million francs in 1903) and in the Territories of 
Senegambia and Niger (6.6 million francs). 



law of 1902, the tax was fixed at 2 for every 
adult native male, 2 for each additional wife 
beyond one, and 10 sh. for each dog owned by a 
native. The native poll tax in the Orange River 
Colony has recently been raised to i. 

The capitation taxes in the North African 
dependencies of France are so high in amount as 
to be plainly unjust, especially as the natives are 
already heavily burdened with other taxes. In 
Tunis the capitation tax (medjba) is collected 
from all male adult Mohammedans except the 
inhabitants of the five principal towns and the 
more prominent officials. All males over fifteen 
years of age are inscribed upon the tax roll and a 
tax of 20 francs per head is collected, which pro- 
duced in 1903 4,375,000 francs. In Algeria, there 
is a graduated capitation tax imposed upon the 
Kabyles. The natives are divided into seven 
classes, the first class being exempt, the others 
assessed from 5 to 100 francs a head. The 
zekkat, also used in Algeria, is a capitation tax on 
animals (4 francs per head for camels, 3 francs for 
cattle, etc.). This tax brings in about 6,500,000 
francs and is the most productive single source 
of Algerian native revenue. 

In Java the poll tax was introduced in 1882 as 
a commutation for the labor dues or corvees owed 
by the natives to the local chiefs above the rank 
of village headmen. A tax of one florin per head 
was levied; and the surplus left over after the 
commuted labor dues have been paid, is to be 
used for a further extension of the system. For 



village and state purposes the corvee is still in 
use, and as its total abolition would impose too 
large a burden of pecuniary payments, there will 
for some time continue to be a double system of 
taxation capitation taxes and labor dues con- 
trolled by the village headmen. 

In the Philippine Islands the American govern- 
ment inherited a capitation tax that was levied 
by the Spanish administration as a payment for a 
cedula personal, or instrument of identification 
and certificate of civil status. The American 
government has retained the requirement by 
which every native must provide himself with a 
cedula, but it has reduced the fee to a uniform 
tax of Pi.oo. The proceeds of this tax are divided 
equally between the provincial and the municipal 
government under which they are collected. 

Income and Business Taxes. The income tax 
("assessed tax") was introduced in British India 
in 1886 (Act II of 1886), in order to relieve the 
pressing need of the government for revenue. It 
is imposed upon all incomes of over 1,000 rupees, 1 
except those derived from agricultural lands, 
which already contribute to the public revenue. 
The general rate is 2.6 per cent, on general in- 
comes above 2,000 rupees, and 2.1 for smaller 
incomes. The imposition of this tax was cer- 
tainly very just and necessary, as under the 
Indian system of taxation the professional and 
moneyed classes did not by any means bear their 
proportionate share of the public burdens, as 

1 Originally 500 rupees, changed in 1903. 


compared with the peasants. Since the exemp- 
tion has been raised to 1,000 rupees, the tax im- 
poses a hardship on no one, and forms a slight 
complement to the land revenue and the salt tax 
which weigh so heavily on the poorer classes. 

In the Dutch East Indies a similar tax is levied. 
In the case of European residents this tax amounts 
to 2 per cent, of the income. The natives and 
orientals are subject to a special income tax 
which is, however, not levied upon incomes de- 
rived from agricultural lands. In the case of the 
natives the rate is 2 per cent, on all incomes over 
25 florins not derived from agriculture; in the 
case of other orientals the rate is 4 per cent, of the 
income with a minimum tax of 2 florins. A 
graduated and progressive inheritance tax has 
been introduced in Porto Rico and in German 
East Africa. 

In the French colonies the business tax is quite 
generally used, the system being based in outline, 
and often in detail, upon the metropolitan legisla- 
tion of July 15, 1880. In Martinique there are, 
for purposes of taxation, two categories, the first 
comprising those professional, industrial, and 
commercial pursuits which are taxed under a gen- 
eral tariff, according to the census of the popula- 
tion in the locality where they are conducted ; the 
second including those forms of business which 
are taxed without regard to population on the 
basis of an exceptional tariff. In Senegal, the 
French Sudan, and Indo-China, there is a fixed 
and a proportional standard for the business tax. 



The fixed standard is based upon the nature of 
the pursuit, the proportional standard upon the 
rental value of the building or buildings used by 
the proprietor of the respective business. The 
pursuits are divided into a numbed of classes, each 
of which is taxable for a fixed amount, to which is 
added the proportional tax. In the French 
Congo and some other African colonies only the 
fixed standard of taxation is used, the duty vary- 
ing between 50 and 600 francs, according to the 
nature of the business. 

In German colonies, too, the business tax has 
been introduced. In East Africa, ordinances of 
1899 and 1900 divided commercial pursuits into 
fourteen classes, paying from 4 to 360 rupees 
respectively. Special license taxes are imposed 
upon inn-keepers, peddlers, and auctioneers. In 
Togo, firms engaged in business pay 800 marks 
for one trading station, 400 marks for each addi- 
tional station on the coast, and 100 marks each 
for additional stations in the interior. The tax is 
reduced if the firm carries on either only export 
or only import trade. Peddlers are taxed 500 
marks a year. In South West Africa an elabo- 
rate tax for the licensing of peddlers is established, 
based upon the nature of the conveyance used by 
the merchant. Even in the remote and undevel- 
"oped colony New Guinea there has been intro- 
duced a business tax of six categories ranging 
from 40 to 600 marks, together with the income 
tax of 2 per cent, upon incomes above 1,500 marks. 

In the Philippine Islands the Spanish govern- 


ment in 1828 introduced an industrial and com- 
mercial tax which was levied exclusively upon 
Chinese tradesmen. In 1878, however, it was 
extended to natives and persons of other nation- 
alities engaged in the industries taxed under the 
old law, and in addition an impost was levied upon 
banking and insurance corporations and whole- 
sale houses. The system was radically revised 
and transformed completely into a business tax 
by the royal decree of June 19, 1890. This law 
enumerated 400 different classes of industries and 
of commercial and professional pursuits. The 
classification was based upon the nature of the 
business itself and upon the character of the 
building used in connection therewith. This 
form of taxation is far more easily administered 
than the income tax proper, because it does not 
necessitate a declaration of income nor any 
inquisitorial proceedings. Though returns of 
income were required in a few of the classes, for 
instance, in the case of banking and insurance 
companies, in general commercial and industrial 
pursuits the amount of the tax was determined 
entirely by external indications. The industrial 
tax was abolished in 1904, and certain parts of the 
internal revenue law 1 of that year have taken its 
place. This law provides that banks shall pay a 
certain monthly tax upon the average amount of 
deposits, the capital employed, and the note cir- 
culation. Insurance companies or agencies are 
to pay one per cent, of the total premiums col- 

1 See page 116, 



lected. Merchants and manufacturers are taxed 
one-third of one per cent, of the gross value of 
all merchandise sold by them; the products of 
chemical and physical processes of manufacture, 
such as electric light, are included under this pro- 
vision. Common carriers pay a tax of one per 
cent, of their gross receipts. Occupation license 
taxes varying from 10 to 200 pesos a year are paid 
by the following: Brokers, proprietors of places 
of amusement, lawyers, doctors, engineers, archi- 
tects, chiropodists, photographers, veterinarians, 
etc. The Hollander Act of Porto Rico estab- 
lished a special business tax upon insurance, 
surety, building and loan companies ; they pay 3 
per cent, upon the gross amount of all dues col- 
lected by them in Porto Rico. 

Colonial Loans. There is no disagreement 
among colonial administrators and financiers 
upon the principle that the colonies should be 
made, as far as possible, financially self-support- 
ing and that they should themselves find the ways 
and means for their ordinary expenses by utiliz- 
ing the resources of various kinds within the 
colony. But it is also true that the development 
of a new country requires expenditures too heavy 
for the ordinary budget and that it is therefore, 
to 'a certain extent, necessary to discount the 
future and to resort to loans for the construction 
of important public works. The problem that 
concerns the colonial administrator is whether the 
funds are to be raised on the credit of the colony 
itself, without any direct concurrent responsibil- 



ity on the part of the mother country, or whether 
the mother country is to assist the colony by a 
direct loan from its own treasury or by guaran- 
teeing a loan negotiated by the colonial govern- 
ment. Often the guarantee of a loan amounts to 
a subvention paid by the mother country in behalf 
of colonial development, and this is sometimes 
contemplated when the guarantee is made. 1 But 
we shall here consider only loans and guarantees 
made upon the basis of colonial fiscal indepen- 

The question then will be how far should the 
mother country aid the colonies by direct loans or 
through allowing them to share its credit. There 
is of course much to be said in favor of complete 
autonomy in the matter of loans. Not feeling 
the powerful financial backing of the mother 
country behind itself, the colonial government 
will be more careful in the expenditure of the 
funds obtained from a loan. It will be exceed- 
ingly disinclined to pledge too large a share of 
the ordinary revenue of the colony. It would 
therefore seem that where a colony has passed 
beyond the first stages of development, and 
where its government has acquired a certain 
standing in the eyes of the financial world through 
having demonstrated the actual resources of the 
colony and through careful methods of adminis- 
tration, the colony may well be left to negotiate 
its own loans, even though it may have to pay a 
slightly higher rate of interest than would be paid 

**. g>, the Algerian railway guarantees. 
10 US 


by the mother country. In this manner it is pro- 
vided with an accurate gauge of its credit, and 
the unavoidable pressure to expend resources on 
questionable undertakings will meet the careful 
scrutiny of the officials and persons most directly 
interested in keeping down the expenses of the 
colony. Even in such a case the mother country 
through its home office and through the governor 
who represents it in the colonial administration, 
will have to exercise a close supervision over the 
indebtedness incurred by the colony, because it 
is after all impossible for the home government 
entirely and absolutely to shift the ultimate re- 
sponsibility for colonial indebtedness upon the 
colony itself. We have not as yet experienced 
a case of successful repudiation of debts by a col- 
ony a fact which is due to the restraining influ- 
ence that the mother country has exercised upon 
colonial administration on account of the feeling 
of ultimate responsibility in the matter. 

In behalf of the policy of having colonial loans 
guaranteed by the home government, it may be 
urged that in this way the colony is enabled to 
secure a much lower rate of interest by participat- 
ing in the credit of the mother country, that the 
officials of the latter have the best opportunities 
for estimating the prospective economic returns 
from such loans, and that they can therefore, by 
setting their stamp of approval upon the proper 
undertakings, assure the financial world that a 
sufficient foundation for credit exists. But as 
was most strikingly exemplified by the sudden 



decline of British consols during the Boer War, 
the credit of even the strongest nation is limited. 
If any nation, therefore, should enter upon an 
indiscriminate policy of guaranteeing colonial 
loans, the relative insecurity of the latter would 
react unfavorably upon the rate of interest paid 
by the mother country itself and would thus 
diminish, to a certain extent, the benefit accruing 
from a loan of metropolitan credit. Exercised 
sparingly, and with a careful consideration of the 
economic needs of a dependency the guarantee of 
loans is a suitable policy in the case of a colony 
that has not yet achieved an established place in 
the financial world, but the resources of which 
are of sufficient value to warrant the expenditure 
of large sums of money upon public works. 

It is generally agreed that borrowing by colo- 
nies for the purpose of meeting current expenses 
would be a most ruinous practice, and also that 
it would be thoroughly unjustifiable for the 
mother country to impose upon a young and un- 
developed dependency the debts incurred in the 
work of military conquest and pacification. In 
general, colonial loans should constitute produc- 
tive investments, and they can prove their justi- 
fication only if the works undertaken pay at least 
a fair rate of interest, with a good prospect of 
larger returns as the country develops. 

Egyptian Finance. There are two dependen- 
cies of European powers, the public debts of 
which were incurred largely through non-produc- 
tive expenditure. These two dependencies, 



British India and Egypt, together have an indebt- 
edness which constitutes about three-fourths of 
the total colonial indebtedness of the world. The 
political history of modern Egypt is practically 
the history of its loans and debt charges. Before 
the final collapse of Egyptian finance under 
Ismail in 1876, debts were incurred by the gov- 
ernment with an almost incredible disregard of 
its financial ability. Though the government 
had already exhausted its legitimate credit, the 
floating indebtedness kept on increasing until in 
1873 it reached the enormous amount of 28,- 
000,000, on which the interest rate averaged 14 
per cent. The government went on borrowing 
money at similar rates of interest, partly for the 
payment of older debts and partly for entirely 
useless expenditures for display and luxury, 1 until 
in 1876 it became evident that default could no 
longer be avoided. The French and British com- 
missioners appointed to straighten out Egyptian 
finances in that year arranged for the funding of 
the entire indebtedness at 89,208,046, with a 
total annual charge of 6,565,023. But the com- 
missioners had greatly overestimated the ability 
of the Egyptian people to pay higher taxes, and 
the annual charge, amounting to over two-thirds 
of the actual revenue, was a burden totally be- 
yond the capacity of the exhausted landholders. 
It therefore soon became apparent that new 
arrangements would have to be made with the 

*The festivities at the opening of the Suez Canal cost over 
one million pounds. 



creditors; and after Great Britain and France 
had together undertaken the control of Egyptian 
affairs, the debt was refunded and its administra- 
tion regulated by the Law of Liquidation of July 
17, 1880. The principal changes introduced by 
this law were : first, the reduction of the interest 
upon the "unified debt" from seven to four per 
cent., making the interest rate lower than that 
of the "privileged debt;" 1 secondly, the creation 
of an administrative organ, the Caisse de la Dette, 
composed of the representatives of the powers 
chiefly interested, who were to supervise the 
administration of the Egyptian revenues and, 
especially, to procure the gradual extinction of 
the debt as provided for by the law. While the 
nominal amount of the debt was increased by 
over 9,000,000, the total annual charge was, 
through a large reduction in the interest rate, cut 
down to E4,3oo,ooo. 2 This interest charge was 
made the first lien upon the Egyptian revenues. 
The current expenditure of the Egyptian govern- 
ment was limited to 4,898,000. Any surplus 
that might be realized was to be applied as fol- 
lows: one-half to the extinction of the debt and 
the other half to the purposes of the administra- 
tion. No new debt was to be incurred without 
the consent of the commissioners of the Caisse de 
la Dette. 

1 The two principal divisions of the debt under the arrange- 
ment of 1876 were the "unified" and the "privileged" debt. 

2 In Egyptian accounts the foreign debt is computed in Brit- 
ish pounds, the charges of the budget in Egyptian pounds 
( E equals $4-94). 



In the year 1885 t* 16 powers, through the Caisse 
de la Dette, authorized the Egyptian government 
to make a further loan of 9,424,000, to be negoti- 
ated at 3 per cent., for the purpose of paying the 
floating indebtedness and the expenses of the 
Alexandrian war indemnities. Being guaranteed 
by the Powers, the loan was secured at exceed- 
ingly favorable rates, and 9,000,000 in funds 
were obtained for the nominal amount of the debt. 
Of this sum 8,000,000 were used for the original 
purposes of the loan; the remaining million was, 
after much hesitation, turned over to the Egyp- 
tian government for the purpose of improving the 
irrigation in the delta of the Nile through the 
repair of the barrage below Cairo. The results 
of this investment were so favorable that further 
loans for the purpose of irrigation were author- 
ized ; these were added to the privileged debt, 
increasing it by 1890 to 29,400,000, or 6,650,- 
ooo over the amount of 1880. At this time the 
interest on the privileged debt was reduced to 3% 
per cent. On account of the obstructive policy 
pursued by France in the Caisse de la Dette, the 
Egyptian government found great difficulty in 
getting the necessary funds for such important 
reforms as the abolition of the corvee. Although 
the credit of Egypt had become gilt-edged the 
surplus revenue was applied by the Caisse de la 
Dette to the purchase of Egyptian bonds for the 
purpose of the more rapid reduction of the debt, 
instead of being used in the economic develop- 
ment of the country. Egypt was thus forced to 



buy back her bonds at the prevailing high market 
prices, often five or six per cent, above par. In 
1904, the total foreign indebtedness of Egypt was 
102,186,920, with an interest rate of from 3 to 
4j4 per cent., all the loans at higher rates having 
gradually been converted. From the nominal 
amount of Egypt's debt as above given there 
must be deducted the sum of 8,137,032, the 
amount of various reserve funds held in Egyptian 
securities by the Caisse de la Dette itself. This 
reduces the total outstanding debt of Egypt to 
about 94,000,000. The total debt charge in 
1904 was 3,858,000, or nearly 500,000 less 
than at the time when the Law of Liquidation 
went into force. 

Debt of India. British India has the largest 
debt of all colonial dependencies. Just preceding 
the Mutiny the total Indian indebtedness was 
49,000,000; but in 1862, as a result of heavy 
military expenditure, it had increased to 95,600,- 
ooo, or to nearly double the former amount, with 
an interest charge of 4,300,000 per annum. 
This large amount of money had been used pri- 
marily to cover the expenses of the original con- 
quest and pacification and of the suppression of 
the great mutiny. Ever since that time, the non- 
productive part of the debt has gradually been 
decreased, but very large amounts have been bor- 
rowed by the government to provide the means 
for an extensive system of public works. Accord- 
ing to the latest figures (1904) the total Indian 
loans raised in Great Britain amount to 133,- 



046,000, with a rate of interest varying from 2j4 
to 4 per cent. ; the loans run for various periods 
ending between the years 1926 and 1948. The 
Indian debt held in India is 79,949,000, with an 
interest varying from 3 to 4^ per cent. The 
highest rate is paid upon the railway loans from 
the Maharajah Holkar, negotiated in 1870 to 1877 
and running for 101 years. Loans from the 
Maharajah Scindia and from the Nawab of Ram- 
pur carry 4 per cent. Later native loans were 
made at lower rates, those of 1897 carrying only 
3 per cent. 

The following table shows the various compo- 
nent parts of the Indian public debt in 1900: 

General debt 67,300,000 

Railway debt 104,500,000 

Irrigation debt 22,800,000 

Unfunded debt 4,500,000 

Various other obligations 13,100,000 

Total 212,200,000 

The general debt constitutes the remainder of the 
original non-productive indebtedness of British 
India which as we have seen amounted to 95,- 
600,000 in 1862. It has therefore since then been 
reduced by 18,000,000. About 130,000,000 
of the total indebtedness of India has been in- 
curred for productive purposes, and the under- 
takings in which these funds have been invested 
have brought a net return more than equal to the 
interest charge upon this part of the debt. In the 
chapter on public works we shall examine more 
closely the productive employment of these funds. 



The debts of the other British tropical depend- 
encies are comparatively unimportant; the only 
such colonies whose debt exceeds a million 
pounds sterling are Ceylon, Jamaica, Trinidad, 
Mauritius, Gold Coast and Lagos. This indebt- 
edness represents almost entirely a productive 
expenditure, which is bringing an ample direct 
or indirect return to the colonial treasuries. The 
Jamaican public debt has risen from 1,500,000 
in 1892 to nearly $y 2 millions in 1904. The largest 
increase occurred in the years 1900 and 1901, 
when heavy payments were made for the redemp- 
tion of railway bonds and for the purchase, recon- 
struction, and extension of the Jamaican railway. 
The interest rate on this debt varies from 2% per 
cent, upon the imperial loan to 6 per cent, upon a 
loan from the Widows' and Orphans' Fund. The 
rapid increase of the debt during the above years 
indicates the confidence of the colonial govern- 
ment and of the Colonial Office that the finances 
of Jamaica can be permanently benefited by the 
liberal expenditure of borrowed money upon pro- 
ductive undertakings. 

Great Britain, true to her principle of colonial 
self-support, has adopted the policy of issuing 
loans to colonies in an entirely business-like man- 
ner and in reliance upon the actual financial re- 
sources available in the colony. Imperial aid to 
the colonies was given a systematic form by the 
Colonial Loans Act of 1899 (62-63 Victoria, Chap- 
ter 36). This act authorized imperial advances 
to colonies for periods of not more than fifty years 


and at a rate of interest of not less than 2% per 
cent. The act requires that the colony must pro- 
vide to the satisfaction of the Treasury and of the 
Secretary of State for duly applying the loan ; for 
charging on the general revenues and assets of 
the colony, with priority over any subsequent 
charges, the principal sum as well as the inter- 
est payments on the loan; and for sufficient 
revenue to meet the above charges. The sum of 
3,800,000 was originally loaned to colonies 
under the act, the principal beneficiaries being 
the Gold Coast, Lagos, the Malay States, the 
Niger Coast Protectorate, Jamaica, and Cyprus. 
The money was used almost entirely for the con- 
struction of public works, such as railways, har- 
bors, waterworks, and roads. 

In the past the French government has been 
exceedingly liberal in the bestowal of guarantees 
which have in many cases amounted to a direct 
subsidy. The French government has, however, 
recently begun to treat the colonial guarantees 
more as a matter of strict finance, and has even 
encouraged some of the colonies to stand entirely 
upon their own credit. All loans taken up by 
French colonies must first be sanctioned by the 
home government either through express ap- 
proval by law of parliament, in the case of Indo- 
China, Madagascar, and Algeria, or through a 
decree of the council of state, in the case of the 
other colonies. Loans of colonial communes 
must, according to the law of November 20, 1882, 
be authorized by the arrete of the governor in 



privy council; and the law of April 13, 1898, pro- 
vides that all communal loans of over 500,000 
francs must be authorized by a decree of the cen- 
tral administration. 

The first indication of the new policy of en- 
couraging colonial autonomy in the matter of 
loans appeared in 1896, when the Tongking- 
Annam loan of 80,000,000 francs was authorized. 
This loan was guaranteed primarily by the rev- 
enues of the colony, and only in a subsidiary way 
by the French state. But in 1898, when the Indo- 
Chinese government 1 asked for a loan of 200,000,- 
ooo francs to be used in constructing an extensive 
system of railways, the French government 
authorized the loan but placed it entirely upon 
the credit of the colony and refused to add its 
own guarantee. It was thought more advisable 
to give Indo-China distinctly a separate credit 
than to continue obscuring her true financial 
standing by interposing the guarantee of the 
mother country. The practice now favored by 
French publicists and administrators contem- 
plates the giving of a guarantee in cases where 
the expense in question is incurred for imperial 
purposes. Where, however, the expenditure is 
primarily for the benefit of the colony itself, the 
state will in general prefer to have the colony 
stand upon its own credit, although it will not 
refuse its aid to colonies which are not sufficiently 
developed for this purpose. It is a common prac- 

*The general budget and fiscal entity of Indo-China was 
created in 1898. 



tice to set aside a particular portion of the colonial 
revenues as special security for a loan. But in 
case the income from the customs revenue is 
selected for this purpose, it will be seen that as 
the colony does not itself have the ultimate con- 
trol over this source of revenue, the setting aside 
of such security does not really benefit the cred- 
itor, who must after all rely upon the totality of 
resources in the colony. 

Until the most recent years the public debts of 
the French colonies have been exceedingly small. 
Algeria, up to 1900, had no financial personality 
and, therefore, no public debt of her own, her 
deficits being met by the mother country. The 
other colonies, while they were endowed with an 
independent budget, nevertheless lived upon the 
resources of the mother country to such an ex- 
tent that separate colonial debts were incurred 
but infrequently. It is only since 1892 that pub- 
lic debts have become more common among the 
French colonies. The most important among 
them are the loans of Indo-China, which have 
already been mentioned, and the debt of 60,000,- 
ooo francs authorized for Madagascar in 1900 and 
indirectly guaranteed by the mother country 
through a promise of subvention in case of the 
insufficiency of colonial revenues. Since 1892 
the sugar colonies the Antilles and Reunion 
have borrowed moderate amounts. In 1902 the 
general government of French West Africa was 
authorized to negotiate a loan of 65,000,000 francs 
for fifty years, for the purpose of constructing 



sanitary and port works and railways, as well as 
repaying the railway loans of Senegal and French 
Guinea. The debt charges are to be inscribed 
among the obligatory expenses in the respective 
colonial budgets. The rate of interest paid is 
usually very low. The loans of Indo-China and 
Madagascar were placed at 2^/2 to 3^ per cent. 
The Indo-Chinese loan of 200,000,000 francs, 
although not guaranteed by the French govern- 
ment, was taken up with the greatest promptness 
by the French public. Algeria, at length en- 
dowed with financial independence, was author- 
ized in 1902 to contract a loan of 50,000,000 francs, 
the proceeds of which are to be employed for the 
construction of roads and harbor works, for rail- 
ways, irrigation, and forestry improvements. 
The Tunisian debt, which, like that of Egypt, 
furnished the occasion for foreign intervention, 
has been gradually converted into a loan bearing 
three per cent, interest, which is guaranteed by 
the French government. The Tunisian govern- 
ment has, moreover, contracted with various 
companies for the construction of harbor works, 
railways, and other public undertakings, under 
the condition that their bonds are to be guaran- 
teed by the state. 

As we glance back at the multitude of facts 
which we have passed in review in this chapter 
it will be apparent that it is impossible for any 
state to construct a hard and fast financial sys- 
tem for its entire colonial empire. In the matter 


of subventions and loans, the degree of develop- 
ment reached by the colonial establishment is the 
sole consideration in deciding as to whether com- 
plete financial autonomy shall be granted the 
dependency, implying full responsibility for obli- 
gations incurred, or whether the colony is to be 
supported by the grant of funds and the loan of 
credit. While recently the British government 
has found it necessary to assist some colonies 
which for decades had been self-supporting, the 
French government has been taking decisive 
steps toward impressing its colonial proteges 
with a sense of their financial responsibility. In 
the case of tropical colonies that absolute finan- 
cial independence which has led the Australian 
colonies into such heavy debts can of course not 
be permitted; and it would seem that on the 
whole the indebtedness which has been incurred 
for the tropical colonies has been more produc- 
tive than the loans which the self-governing col- 
onies of Australia and New Zealand have so lav- 
ishly made use of. 

Few general rules can be laid down in the mat- 
ter of colonial taxation; the local circumstances 
and conditions in their almost endless variety 
necessitate changes from any uniform system 
that may be established in a colonial empire. 
Even France, when still in the full enthusiasm of 
her assimilation policy, could not enforce a uni- 
form fiscal policy in all her colonies. It is impor- 
tant to distinguish modes of taxation sharply as 
to their probable effect on the economic and 


moral development of a colonial population, and 
to reject those which either tend to retard the 
growth of economic life by rendering the colony 
too subservient to the ends of the home country, 
or which place an undue burden upon the native 

The British and Dutch taxation systems in the 
Orient with their large land and salt revenue, and 
their opium monopoly, while they do not comply 
with the generally accepted canons of taxation, 
are nevertheless conditioned by historic custom 
and by local circumstances, so as to render a rad- 
ical transformation in the direction of more lib- 
eral methods of taxation very difficult. But in 
the African and Oceanic colonies, where condi- 
tions are less settled, there is no excuse for intro- 
ducing exploitative modes of taxation, such as 
high hut taxes or excessive capitation rates. The 
heavy taxation of the natives in Algeria is an 
instance of special injustice, which is not atoned 
for even by the great sacrifices which the French 
nation has made for Algeria; and it is to be 
highly commended that the Algerian Financial 
Delegations at present show a tendency to dis- 
tribute the burden of taxation more equitably 
between the European colonists and the natives. 
For undeveloped colonies import duties will long 
remain the principal reliance of the colonial treas- 
ury, and the attempt to enhance these taxes so 
as to form a protective tariff wall ought to be 
resisted not only for fiscal reasons but out of re- 



gard for the needs of development in the colony 

A very important matter in colonial finance is 
the question of fiscal decentralization. If the po- 
litical education of the native population is really 
a matter of concern to the colonizing powers it 
seems a sound policy that certain taxes should 
be set aside exclusively for local administration, 
and evidently the direct taxes are better adapted 
for this purpose than is the excise or the customs 
revenue. For, practically the only manner in 
which the natives can be interested in local gov- 
ernment is by having them know that the assess- 
ment and the disposal of the revenue from direct 
taxes is determined by the local authorities, in 
whose choice they have some influence and whose 
counsels they control. The financial system of 
the colony touches upon all the pursuits of indus- 
trial life and may be used to further or retard at 
pleasure certain economic developments. Tax- 
ation may modify the current of commerce, and a 
loan of credit, in rendering possible the execution 
of public works, opens the way for industrial 
advance. A too liberal appropriation of colonial 
funds to pay for materials and services in the 
mother country, in behalf of the colonial govern- 
ment, may lead to a derangement of normal eco- 
nomic relations and may retard development in 
the dependency. Considerations such as these 
affect deeply the economic life of colonial posses- 
sions! and in studying the various aspects of eco- 



nomic development we shall have occasion again 
and again to refer to fiscal methods. 



British Parliamentary Papers. Colonial Reports. An- 
nual. The Same, Statistical Abstract relating to India, 
1902. P. 46. The Same, 1901. Vol. 75: i. (Rates of im- 
port duties in British colonies). The Same, Report on 
Egypt, 1902. Statistical Abstract for the Colonial and other 
Possessions of the United Kingdom. London, 1904. 
Land Revenue Policy of the Indian Government. Calcutta, 
1902. Financial Statement of the Government of India. 
Annual. In the Parliamentary Papers. Minutes of Evi- 
dence and Final Report of the Royal Commission on the 
Administration of the Expenditure of India. 4 vols. 
Parliamentary Papers 1900 and 1901. Third Annual Report 
of the Philippine Commission. Washington, 1903. Pp. 
69i-7i7.Fourth Annual Report. Part III. P. 267 ff. 
Deutsche Kolonialgesetzgebung. Part VI, 197 et passim. 
Rapport d'ensemble du General Gallieni sur la situation 
generate de Madagascar. Paris, 1899. Vol. 2 : 358-446. 
DE SOLLIERS, Rapport general sur le projet de budget pour 
Texercice 1903. Alger, 1902. DOUMER, P., Situation de 
rindo-Chine. Hanoi, 1902. Pp. 131-188. Report of the 
Opium Bureau of the Formosan Government. Taiwan, 


ARNAUD and MERAY, Les Colonies franchises. Paris, 
1900. 173-209. BADEN-POWELL, B. H., Land Systems of 
British India. Oxford, 1898. I, 241. BOUCHIE DE BELLE, 
E., Le regime financier des colonies. Paris, 1903. Bou- 
LARD, M., Les finances de la Tunisie. Paris, 1901. LE 
BOURDAIS DES TOUCHES, J., Le regime financier des colonies 
franchises. Paris, 1898. CHOTARD, M., "Des rapports finan- 
ciers entre la metropole et les colonies." Inst. Col. Int. 
ll ifa 


Compte rendu, 1901. 239 sq. DAWKINS, C. E., "The Egyp- 
tian Public Debt." N. A. R. Oct., 1901. DEMORGNY, Les 
principales reformes financieres en Indo-Chine de 1897 a 
1899. DIANOUS, P. DE, Legislation tunisienne. Paris, 1898. 
Ch. 9. Essays in Colonial Finance by Members of the 
American Economic Association. New York, 1900. 
FRANCOIS, S., Le budget local des colonies. Paris, 1900. 
FRANQOIS, R., Le Depenses coloniales de souverainete. 
Paris, 1902. FRANCONIE, J., "Les emprunts coloniaux." 
Q. D. C. 1 1 : 220. GIRAULT, Principes de colonisation. 
Vol. I. Paris, 1903. HOLLANDER, J. H., "The Finances of 
Porto Rico." Pol. Sc. Qu. 16 : 553. HOXIE, R. F., "Colo- 
nial Policy and the Tariff." Journ. Pol. Econ. 2: 193. 
JENKS, J. W., Report on certain Economic Questions in the 
English and Dutch Colonies in the Orient. Washington, 
1902. Ch. 4. JONES, E. R., The Shipping World Year 
Book, 1903. 745-850. (Tariffs of the British Colonies). 
LAVAGNE, P., "La politique financiere de 1'empire anglo- 
indien." Ann. des Sc. P., 1903. LEVY, R. S., "Les finances 
de 1'Egyptc." R. P. et P. 38:491. LOUTER, J. DE, Staats 
en Administratief Recht van Nederl. Indie. 262-420. 
PLEHN, C. C, "Taxation in the Philippines." Pol. Sc. Qu. 
Vols. 16 and 17. SALAUN, L., Essai sur 1'organisation de 
I'lndo-Chine. Hanoi, 1901. THOMAS, J., "L'Algerie et 
rautonomie budgetaire." Rev. de Droit Public. 18 : 5. 
WAAL, DE, Onse Indische Financien. Hague, 1875-84. 




Currency Areas. The world is divided into a 
number of clearly marked currency areas. Out- 
side of the gold using countries, the most inter- 
esting and important of these is the area of the 
Far East, in which the Mexican dollar or a silver 
coin of like size is the ordinary medium of ex- 
change. This area comprises China, Hongkong, 
French Indo-China, Singapore, Borneo, and the 
Philippine Islands. The currency here rests 
entirely upon the basis of exchange value, except 
in the Philippines, where the gold exchange stand- 
ard has been established. The use of the dollar 
goes back to the time when Mexico as well as the 
Philippines were Spanish dependencies. The 
rich silver mines of Mexico furnished the circulat- 
ing medium for a large part of the Spanish 
dominions, including those in the Orient, and as 
Spain was at that time the most prominent colo- 
nial power east of India, the use of the dollar 
spread from the Philippine Islands to other adja- 
cent parts of the Oriental world. Even at the 
present time there are more Mexican dollars in 
circulation in the Orient than in Mexico itself. 
The coin supply is usually shipped from Mexico 



to Europe by merchants who in this manner pay 
for imported goods. From Europe the silver 
dollars are exported as articles of commerce to 
the Orient, where large quantities of them are 
absorbed. Trade dollars, similar to the Mexican 
coin, have been struck in French Indo-China and 
in Singapore, but the Mexican dollar still forms 
the general standard of currency. Great impor- 
tance is given to this form of currency by the fact 
that the Chinese coolies are accustomed to it and 
prefer it to any other kind of money. Taken 
back to China it loses nothing by exchange; in 
fact it passes readily in most parts of the Far 

India and the territories subsidiary to the em- 
pire form another currency area, in which the 
Indian rupee is the standard. The rupee was 
originally valued at 2 shillings, but its intrinsic 
value now is only about one-half of that amount. 
We shall see later that in India itself the coin 
has been given a gold exchange value by law. 
This is also true of Ceylon; Mauritius and the 
east coast of Africa, which by nature belong to 
this area, also use the silver rupee at the Indian 
rate of exchange. 

The third currency area is that of Central and 
West Africa. Here the currency is in a chaotic 
condition. Throughout the interior regions 
slaves are the most convenient form of money, 
not only because of the fact that they are every- 
where in demand but also for the reason that they 
yield a good interest when employed as carriers. 



For small change, cowry shells are used in these 
parts of Africa. Bundles of brass or copper rods 
have their fixed value as currency in some regions 
while in others horse-shoe like pieces of metal 
known as manilas are used as a medium of ex- 
change. In Bornu and in the Hausa states as 
well as in others of the more advanced countries 
of Central and West Africa, the old Austrian coin 
called the Maria Theresa dollar has been in use 
for a long time. Coins of this denomination with 
the date of 1780 are still struck in Austria for the 
purpose of supplying this market. In the coast 
towns of West Africa, European coins, especially 
those of the Latin Union, of Germany, and of 
Great Britain, circulate freely. Altogether, there 
is no greater need in the central parts of Africa 
than that of a settled system of currency. 

The West Indies form a fourth currency area. 
The actual currency in use in the British West 
Indies is British silver, although both British and 
United States gold are legal tender. As a mat- 
ter of fact, silver, being legal tender to any 
amount, is practically the sole currency. These 
colonies therefore have a silver currency kept at 
par with gold through their connection with the 
mother country, whose gold value coins circulate 
in the islands. 

In 1825 the British government attempted to 
introduce a uniform system of currency by mak- 
ing British coins legal tender throughout the col- 
onies. This attempt was, however, soon aban- 
doned as it was found that many obstacles to 



such a plan of uniformity were encountered. The 
British coinage with its high valuations is not so 
well adapted for use in new and undeveloped 
regions. The German government is, however, 
trying to do the same thing to-day, and by law 
German coinage has been introduced into most 
of the German colonies. In 1886 the currency 
system of Kamerun was assimilated to that of 
Germany and the equivalents of the older cur- 
rency of palm kernels, palm oil, and krus, are now 
expressed in terms of marks. In German East 
Africa, which belongs to the rupee area, the use 
of the Austrian dollar is strictly forbidden and 
the exchange rate between German and Indian 
rupees is held at par by the government. As the 
German monetary system has a very small coin 
in the pfennig, it is perhaps better adapted to new 
regions than the system of England, unless the 
vitality of the farthing is to be restored. 

Before we turn to a more special study of the 
currency systems in the various areas it may be 
well to state some of the general principles which 
distinguish the colonial currency problem from 
that in more advanced countries. That a stable 
and uniform currency is necessary for economic 
development goes without saying. Commercial 
transactions are subject to great risks under a 
fluctuating exchange and capital is very reluc- 
tant to enter a region which has no settled mone- 
tary conditions. By saying that a region should 
have a settled currency we do not, however, im- 
ply that its currency should be entirely assimi- 



lated to that of the gold-using countries. The 
following alternatives present themselves in this 
matter : the gold standard may be introduced, or 
the country may be left entirely on the silver 
basis, or finally, a settled exchange value may be 
established between gold and silver. The first 
alternative does not appear feasible at the present 
stage of development. The quantity of gold in 
the world is not sufficient for the demand that 
would arise were it to be made the actual medium 
of exchange throughout the inhabited globe. 
Moreover, the custom in many large areas is 
firmly set against the use of gold. In the Orient 
wages are so low that as a payment for labor, gold 
would be too insignificant in bulk to be accept- 
able. The workmen of these regions are accus- 
tomed to silver and prefer to receive their wages 
in silver coins on account of their greater size. 
They would be dissatisfied if instead of ten big 
Mexican dollars they were given one small sover- 
eign. The question therefore reduces itself to 
the two alternatives as to whether silver is to be 
used as a medium of exchange entirely at its nat- 
ural value without any attempt to regulate its 
ratio to gold, or whether a permanent rate of 
exchange is to be fixed by governmental action 
so as to avoid constant fluctuations between the 
two metals. We shall be in a better position to 
judge as to the advisability of taking either 
alternative after we have reviewed the recent ex- 
perience of the currency areas of India and of the 
Far East. 



Indian Currency. In India the coinage of sil- 
ver was free until 1893. The rupee, the principal 
Indian coin, contains nearly as much silver as the 
American half dollar. After the silver crisis of 
1873 ^e rupee gradually declined in value. In 
1893, when it had fallen to 14.9 pence, the Indian 
government saw itself confronted with a very 
serious condition. India, being heavily indebted 
to Great Britain and paying in that country for- 
midable sums for supplies, pensions, and salaries, 
found it more difficult year by year to meet these 
gold payments while the taxes were received in 
silver, the value of which was constantly falling. 
To increase the taxes was impossible, because all 
available sources of revenue were already utilized 
to the fullest extent. The only remaining re- 
source of the government seemed to lie in pre- 
venting a further decline of the silver rupee and 
in thus maintaining the gold value of the revenue. 
The first step toward this end was to stop the 
free coinage of silver, with the result of limiting 
the supply and giving the existing coinage a 
prospectively higher value. At the time when 
the coinage of silver was suspended the govern- 
ment announced that it would accept gold coin 
or bullion for rupees at the rate of sixteen pence 
per rupee or fifteen rupees to the sovereign. The 
government also attempted to establish an ex- 
change rate with Europe at this same ratio, but 
while it was possible to maintain the rate tem- 
porarily at this point it soon began to fall very 
rapidly and in 1895 stood as low as 12.4 pence. 

1 68 


After this, however, the limitation upon the out- 
put of silver coin began to tell and the exchange 
gradually rose until in 1897 the rate of 16 pence 
which was contemplated by the measures of the 
government was finally reached and could be 
maintained. On September 15, 1899, the govern- 
ment took the second important step toward 
establishing the gold exchange standard. On 
this date sovereigns were made legal tender in 
India, within a twelvemonth the government was 
even ready to use its gold reserve fund for the 
purpose of redeeming rupees at the rate of fifteen 
to one sovereign. As by this time a great scarcity 
of rupees existed in India there was no call for 
gold ; on the contrary there occurred a remarkable 
rush for silver coin so that the currency gold 
reserve rose from 2,030,000 in 1899 to 8,569,- 
800 on March 7, 1900. In the fiscal year 1903 to 
1904, over 165,000,000 silver rupees were coined, 
the largest amount on record for any single yean 
Considered purely as a fiscal or monetary reform 
the gold exchange standard was therefore emi- 
nently successful. The Indian government had 
secured its purpose of making the supply of 
rupees scarce enough to raise the rupee perma- 
nently to the contemplated value. And far from 
being called upon to expend large amounts of 
gold in the effort of establishing a fixed standard, 
the government was virtually flooded with the 
yellow metal by bankers desirous of obtaining 
the customary circulating medium. 

But notwithstanding the great success of this 


measure, it cannot be concealed that it consti- 
tuted a heavy indirect tax upon the general popu- 
lation of India. Finding it impossible to levy 
additional taxes, the Indian government has 
accomplished the same purpose by enhancing the 
value of the circulating medium, which conse- 
quently is now more difficult to obtain for the 
taxpayer. While it may be going too far to 
ascribe the sharp suffering that has fallen upon 
the agricultural classes of India during the last 
decade entirely to this rise in the value of money, 
it will be readily seen that a change of such far 
reaching importance so suddenly carried out 
must have in some measure contributed to the 
economic distress of the masses. Yet, it is not 
easy to suggest in what different manner the 
Indian government, with its large debt to a gold 
using country, could have escaped the force of a 
situation which rendered an enhancement of the 
value of the circulating medium the simplest and 
easiest solution of the difficulties. 

Ceylon, in many respects a satellite of India, 
has followed her great neighbor also in the mat- 
ter of a currency. In 1902 the sovereign was made 
legal tender ,and the rupee was placed at the same 
fixed ratio with gold that obtains in the Indian 
Empire. The Indian rupee coinage is also used 
in Mauritius as well as. in British East Africa. 
Mauritius was apparently well satisfied with a 
silver currency, as it enabled the planters to profit 
by a falling standard of wages. 

The colonies of the Netherlands in the Orient 


have never experienced the results of a rapidly 
falling standard of value. 1 Their currency has 
always been kept in close communication with 
that of the mother country, although there is 
practically no gold in circulation in Java and 
Sumatra. The silver and paper currency of Java 
has been kept at a stable ratio to gold by the 
maintenance of a large gold reserve. This re- 
serve cannot, however, be drawn upon for inland 
uses; it is used only when gold shipments to 
Europe become necessary in order to maintain 
the ratio of exchange. There is in fact no demand 
for gold in the interior regions; the current cir- 
culating medium fulfils all necessary purposes, 
and when gold is needed for export either bills 
of exchange or the metal itself are furnished by 
the banking institution. 

The Area of the Mexican Dollar. Turning 
now to the currency area in which the silver dol- 
lar is the ordinary medium of exchange, we find 
that, at first sight, the countries in this region are 
not entirely dissatisfied with their monetary con- 
ditions. As long as silver continues to fall grad- 
ually many classes are directly benefited by this 
situation. The exporters who purchase the prod- 
uce of the country for silver sell it again mostly 
to gold-paying countries, and therefore do not lose 
through any difference in exchange. The same 
is true of the producing classes. They pay for 
labor and supplies in the local currency at prices 

1 With the exception of the east coast of Sumatra, where the 
silver dollar is current. 



which do not rise at all, or at least not so rapidly 
as the medium declines. The laboring classes 
also do not feel the change in the value of their 
money, as most of the articles which they use for 
food and clothing have a steady silver exchange 
value. The banking institutions are not opposed 
to this unstable condition because under it they 
conduct a very profitable exchange business. 
The only class who are subject to constant loss 
are the importing merchants, who have to pay in 
gold and must take the risk of being able to make 
up losses in exchange by increasing their prices. 
There is of course a general commercial disad- 
vantage in a fluctuating currency, for although 
the element of risk may often turn out favorably 
to the producing classes, it nevertheless renders 
commerce and production less secure and there- 
fore in the long run less inviting to capital. This 
applies more particularly to imported capital than 
to that of the country or colony itself. A falling 
standard can, however, be favorable only as long 
as a colony is not heavily indebted to the gold 
using countries. As soon as debt of this kind 
begins to play a prominent part in colonial affairs, 
the loss of value in the ordinary circulating 
medium renders the payment of the debt charges 
more and more difficult. For this reason and on 
account of the general commercial considerations 
above set forth, there is at the present time a 
strong movement throughout this entire region 
in favor of the adoption of a gold exchange stan- 



The semi-independent country of Siam has 
already led the way towards the adoption of the 
gold basis ; on November 27, 1902, the royal mint 
was closed to the free coinage of silver, and at 
the same time the government attempted to influ- 
ence the ratio of exchange by announcing that 
the Siamese minister in London would issue 
drafts on Bangkok at the ratio of 17 ticals to i. 
The actual exchange rate just before this time 
had been 21 ticals to i. This sudden action of 
the government was felt as a severe blow by the 
business interests, and the banks refused to fol- 
low the lead. They, however, sold drafts on 
London at the rate of 20 ticals per i. It would 
therefore seem that the experience of India is to 
be repeated in Siam and that the rate of exchange 
will only gradually rise to the standard set by 
the government, until finally the complete ex- 
changeability of silver for gold at the desired 
ratio may be established. 

This action of Siam has aroused great interest 
in the Straits Settlements and in Indo-China. In 
the former colony the Mexican dollar had at the 
beginning of 1903 fallen to is. 7d., the lowest 
point it had ever reached. Although the export- 
ers and the owners of tin mines were opposed to 
a change in the standard, the general commercial 
interests of the Straits Settlements and the Fed- 
erated States declared themselves strongly in 
favor of establishing a sterling exchange basis at 
the rate of 2 shillings to the dollar. Accord- 
ingly, on the basis of a report by a special com- 


mission, an ordinance was passed in September, 
1903, which looks toward the gradual establish- 
ment of a gold exchange standard. Under the 
provisions of this law, "Straits dollars" are being 
coined and put in circulation. Their export as 
well as the importation into the colony of Mex- 
ican and British dollars is forbidden ; and as soon 
as the new currency has become firmly estab- 
lished and is generally used by the people, it is 
to be gradually raised to a fixed gold value by the 
limitation of further output. Indo-China too is 
beginning to show signs of agitation for a 
stable exchange rate. The French government 
attempted at one time to introduce its monetary 
system into Cochin-China, but this attempt was 
speedily abandoned. Under the present system 
the governmental rate of exchange is fixed on the 
twenty-fifth of each month by arrete of the gov- 
ernor on the basis of the mean of the actual rate 
of exchange during the preceding month. This 
governmental rate, however, is applied only to 
public transactions and has no effect at all upon 
the commercial rate of exchange. Recently 
Indo-China has incurred a heavy indebtedness 
(280,000,000 francs), authorized for the purpose 
of constructing railways and other internal im- 
provements. It can therefore already be fore- 
seen that the government of this dependency will 
before long find itself in a position similar to that 
of India in 1893. With a constantly falling ratio 
of exchange, it will soon become too difficult to 
make the revenue of the country large enough 


to meet the debt charge in addition to the other 
expenses of the government. At that point, if 
not before, the government of French Indo-China 
will see that it is obliged to follow in the foot- 
steps of British India, Ceylon, and Siam, and by 
governmental action to fix the ratio between the 
ordinary currency and the gold coinage of 
Europe. 1 While the empire of China is not within 
the scope of the present study, it will be seen that 
the large war indemnities incurred in 1900 will 
also afford a powerful incentive to try to prevent 
the continued fall in the value of the medium in 
which taxes are paid to the government. 

The Philippine Islands have currency prob- 
lems which are analogous to those we have just 
reviewed. While at the time of the American 
conquest many among the merchants and indus- 
trials of the islands favored the silver basis, it 
was felt that the development of the colony 
would proceed far more rapidly were some fixed 
ratio established. Though the Philippines are 
not as yet burdened with a heavy indebtedness, 
still the government has to meet the problem of 
paying salaries and supply accounts, computed 
on the gold basis, with a revenue paid in silver; 
and the larger the interest acquired by the United 
States and European countries in the Philippines, 
the more disturbing to business and industrial 
relations would the fluctuating disparity between 
gold and silver become. The situation in the 

*In 1903 the importation of foreign silver coins into Indo- 
China was forbidden. 



Philippine Islands was rendered especially unsat- 
isfactory because the currency was supplied by a 
foreign state and was therefore entirely uncon- 
trolled by the Philippine government itself. It 
was therefore subject to various contingencies 
resulting often in great fluctuations and in a 
serious stringency of the money supply. Thus 
in the year 1900, when large amounts of silver 
money were used in the expedition of the allies in 
China, for the purpose of paying for provisions, 
Mexican dollars were drawn out of the Philippine 
Islands so rapidly that a veritable money famine 
was impending. 

For these various reasons the Philippine Com- 
mission determined to recommend the creation 
of a specific Philippine coinage. They proposed 
"that the silver coin should be maintained at a 
fixed ratio with gold by the limitation of the 
amount coined and by a gold reserve to be con- 
stituted from the seignorage derived from the 
coinage of silver bullion and to be employed in 
the discretion of the Philippine government for 
the direct exchange of silver for gold and in such 
other ways as may be necessary to maintain the 
parity fixed by law." The proposed coin was to 
be somewhat less in weight than the Mexican 
dollar, in order to guard against a possible rise 
in the value of the silver peso beyond its legal 
exchange value, as under such a contingency the 
money would of course be exported. After much 
discussion Congress adopted the proposal of the 
Commission. By the law of March 2, 1903, the 



Philippine government was authorized to coin 
75,000,000 silver pesos, of the weight of 416 
grains, nine-tenths fine. This peso is to be main- 
tained at a fixed value of fifty cents gold, and the 
Philippine government is authorized to borrow 
money for this purpose. The confusion of cur- 
rency in the islands was for a time enhanced by 
the presence of the new coin, unfamiliar to the 
natives, which not even the designation of "Fili- 
pino" seemed to render popular. But the gov- 
ernment succeeded, by the end of 1904, in elim- 
inating from circulation over thirty millions of 
debased currency, and over sixteen millions of 
the new coin were in actual business circulation 
at that time. 

Looking now at the general monetary situation 
in these various colonies, it would seem that the 
adoption of a fixed exchange value between gold 
and silver will be rendered unavoidable by the 
very conditions of colonial economic life. Unde- 
veloped countries, in which the means of com- 
munication and the industrial methods of West- 
ern nations are being installed, will necessarily 
incur a heavy debt, which will be held largely in 
gold-using countries. Sooner or later it will 
become impossible to pay the debt charges out 
of the resources of a country with a constantly 
depreciating currency. If the change to a stable 
standard is delayed until that point is reached, it 
will be as difficult and will entail as much inci- 
dental suffering as followed upon the monetary 
reform introduced by the Indian government, 

13 177 


It would seem therefore that the speedy estab- 
lishment of a ratio as near as possible to the nat- 
ural values would be advisable in all these 
dependencies. In fixing the ratio there are two 
horns of a dilemma which have to be avoided. 
If the ratio is made very liberal to silver, so that 
the silver when coined is given a far greater value 
than it has as bullion, counterfeiting will be in- 
vited; and in Oriental countries this practice 
could be carried on with far greater success and 
ease than in the United States or Europe. If, on 
the other hand, the coinage value should be too 
near the rate of commercial exchange between 
gold and silver, the further rise in the value of 
silver, which is not altogether improbable, would 
lead to the exportation of the medium of exchange 
from the territory in which an unfavorable ratio 
obtains. It is, however, generally believed that 
a ratio between gold and silver in the neighbor- 
hood of i to 32 is sufficiently above the commer- 
cial ratio at the present time to afford an adequate 
protection against the latter contingency, while 
it is not high enough to invite counterfeiting. 

Under any gold exchange system the coinage 
of silver must of course be limited, because in 
this way only can the government control the 
value of the silver currency to a certain extent. 
In this manner the gold exchange value can prob- 
ably be maintained at a very moderate cost. As 
has been suggested, all that would be necessary 
to secure this end would be for the colonial gov- 
ernment to sell gold exchange at a fixed rate in 



the dependency and to furnish silver exchange 
upon the latter at the same rate in the mother 
country. As a demand for gold coin in the 
interior of these dependencies practically does 
not exist, silver being the customary medium of 
exchange, and, supplemented with paper currency 
for larger amounts, being perfectly sufficient for 
the purposes of internal trade, gold would be 
used only for export and its place would even 
there ordinarily be taken by bills of exchange. 
Should the colony purchase heavily from the 
exterior there would of course be a run for gold 
or gold exchange. Much silver would be turned 
in, but, as the coinage of silver is limited, the very 
constant demand for silver currency in the in- 
terior would tend to prevent the fall of silver from 
the fixed ratio value. As soon as the demand 
for gold is satisfied gold will again be returned 
to the treasury, in large amounts, as was the case 
in India, in order to obtain the silver needed for 
ordinary business transactions. The example of 
the Javanese government has shown that the 
gold exchange standard may be maintained with- 
out the use of gold in the interior. Notwith- 
standing these considerations, it is conceivable 
that a very heavy strain may be put upon the 
treasury in times of depression. And when we 
consider that under the system of a gold exchange 
value established throughout the world the entire 
currency of the world would rest upon the com- 
paratively small supply of gold extant, it may 
seem that the structure of the world's financial 



system is being reared upon too narrow a foun- 
dation. This argument, however, loses much of 
its force when we recognize how little gold will 
be called for in the actual business transactions 
of the colonial dependencies. The amount of 
gold necessary to maintain the exchange stand- 
ard will therefore perhaps not put a greater 
strain upon the gold supply than the constant 
increase of the world's holding of the yellow 
metal will support. 

Currency in Africa. The currency problems 
of the central and western regions of Africa are 
analogous to those which we have already dis- 
cussed, although these regions have not reached 
the stage of development of the silver using col- 
onies. It is unfortunate that on account of the 
promiscuous use of the Indian rupee, the Maria 
Theresa and the Mexican dollars, and the Ger- 
man, British, and French coinage, the natives 
should have become very much confused in their 
sense of money values. Nowhere would civili- 
zation be helped more by the establishment of a 
general standard of exchange than in Africa, and 
nowhere does the establishment of such a stand- 
ard at present seem more hopeless. Currency 
reform alone would go far towards solving some 
of the most obstinate problems in African devel- 
opment. At the present time the merchant has 
to take into the interior large quantities of goods 
in order to barter them off for ivory, rubber, and 
other valuable products of the country. He 
needs slaves as carriers and he also uses them as 



a medium of exchange. 1 The native currency in 
these parts of Africa is so bulky that even a small 
payment would necessitate the employment of 
several slaves to carry it between villages. The 
introduction of an easily-portable, universally- 
accepted medium would wipe out more abuses in 
the African inland regions than any other one 
economic change with the possible exception of 
the establishment of perfected means of com- 
munication. It seems at present most likely that 
an attempt will quite generally be made to place 
the African colonies upon a gold basis with a sil- 
ver currency. Germany, as we have seen, is 
beginning to introduce her gold-value silver coin- 
age into her African colonies, and the French 
West African colonies along the coast use to 
some extent the currency of the Latin Union. In 
the British West African colonies comparatively 
little progress has been made beyond the stage of 
barter, but, as in the case of the West Indies, sil- 
ver with a gold value is beginning to be used. A 
very grave objection to this system exists in the 
fact that the currency value is so far in excess of 
the commercial value of silver that it would be 
practically impossible to prevent counterfeiting. 
The question of coinage in Africa has so far not 
been attacked in earnest by the colonial powers 
with a view to concerted action. It is highly 
desirable that they should act together in this 

1 Bills of exchange calling for a certain number of slaves to 
be delivered to the payee, are frequently drawn in the interior 
regions of Africa. 



matter and that, in order to avoid the danger of 
counterfeiting, a coinage somewhat like that of 
British India should be adopted. This at any 
rate would seem to be the most rational policy 
although at the present time there is little indica- 
tion of a serious consideration of this question 
upon the broad basis of general African civiliza- 

Currency in the West Indies. In Porto Rico 
the United States has followed the example of 
Great Britain in her West Indian colonies and 
has introduced her own gold coinage system. 
The sudden change from silver to the gold basis, 
together with all the other revolutionary devel- 
opments that broke in upon this community gave 
a shock to business and industrial enterprise 
from which they took some time to recover. It 
is important clearly to distinguish between the 
silver currency as used in the* West Indies and 
that used in British India. The British West 
Indian colonies have the gold standard, though 
there is very little gold in circulation. They 
share the characteristics of the system of the 
United States, where a high artificial value is 
given to large quantities of coined silver. In 
British India, however, coined silver is dealt with 
more nearly on the basis of its commercial value, 
and it is the latter system that commends itself 
for use in the colonies for reasons which have 
already been brought out. The artificial appreci- 
ation of coined silver much beyond its natural 
value does not seem advisable outside of highly 



developed countries with a perfect police organ- 
ization for the preventing of counterfeiting, and 
of small colonies easily controlled, such as the 
West Indies. In all other colonies the gold ex- 
change standard should correspond more nearly 
to the commercial value of the two metals. 

Banks and Banking. With respect to agricul- 
tural and industrial undertakings there is a radi- 
cal difference between settlement colonies and 
dependencies in the tropics. In the former the 
individual settler is comparatively independent 
of capital. Everywhere the free land is open to 
him, and if thrifty and energetic, he soon renders 
himself economically self-sufficing. In the lat- 
ter, however, a settler without capital cannot 
easily succeed, because he has to compete with a 
laboring population inured to the climate and 
satisfied with a very paltry return for their work. 
The European settler in the tropics, therefore, 
needs capital in order to be able to draw the nat- 
ural wealth from the soil. He must employ 
native labor and purchase expensive machinery. 
Moreover, each European colonist will extend his 
energies over large areas and white communal 
settlements with attractive social life will but 
rarely be encountered in the tropics. It is there- 
fore natural that the development of the tropics 
should be undertaken rather by companies, in 
which men join together their capital and their 
powers of initiative companies which through 
their agents, with the aid of large capital and 
improved machinery, do what the individual set- 



tier would find it difficult or impossible to accom- 

While the capital for industrial undertakings 
in the dependencies will be obtained chiefly in the 
mother country, nevertheless where colonies are 
already on a comparatively high plane of devel- 
opment they also can contribute their share of 
social capital. The problem is therefore to 
gather together the available financial resources 
both in the mother country and in the depend- 
ency, and to apply them to the development of 
agriculture, industry, and commerce in a manner 
which combines the encouragement of thor- 
oughly legitimate undertakings with perfect 
security of the investment. 

For the expansion of commerce in colonial 
regions it is most essential that strong institu- 
tions of credit should exist. The old British 
method of demanding payment upon shipment of 
goods can no longer be employed when, in the 
sharp competition between merchants of the 
various nations, the giving of long credit becomes 
one of the chief instruments for the extension of 
trade. The German merchants have been espe- 
cially liberal in the terms of credit which they 
have accorded their customers in colonial regions. 
Having established direct personal relations with 
the latter, they could afford to assume risks more 
readily that the British houses who generally deal 
with their clients at long range. The only alter- 
native to a direct personal knowledge of the cli- 
ents is a perfect local banking system, through 



which longer credit can be extended to the mer- 
chants upon commercial security. This relieves 
the commercial houses in European countries 
from keeping an absolute check upon the indi- 
vidual financial standing of all their customers and 
enables them through the agency of the banks to 
extend all proper credit facilities. 

The connection of banking with plantation 
agriculture and with peasant cultivation is 
especially interesting. The subject of agricul- 
tural loans, in fact, constitutes in itself an impor- 
tant chapter in colonial administration. It is not 
sufficient that mortgage loans secured upon real 
estate should be granted, although a carefully 
developed system of such loans is also necessary. 
What is needed by the colonist and by the peasant 
proprietor is credit based upon his own capacity 
for efficient work and upon the harvests which 
he has reason to expect. It is therefore a credit 
based upon growing crops rather than upon real 
property. Both the owner of the plantation, 
who often finds himself in a precarious financial 
condition just before a large harvest, and the 
peasant proprietor, who is constantly in danger 
of becoming indebted to usurious money-lenders, 
are in great need of a perfectly developed agricul- 
tural loan system. 

Colonial credit differs from the system of bank- 
ing in more highly developed countries chiefly 
in this respect, that far greater flexibility must 
be allowed in colonial banking methods in order 
that they may be adapted to the various exigen- 


cies of a new country where economic life has not 
yet become crystallized into definite forms. 
Colonial banking must counteract the tendency 
of individuals to impose rapacious rates of inter- 
est in new countries. It must be able clearly to 
gauge the productivity of agricultural regions 
and the reliability of the persons who enter upon 
the various colonial enterprises. Renewals and 
long credits are likely to be demanded even more 
urgently of colonial than of metropolitan banks, 
and these operations impose upon them a greater 
risk on account of the uncertain future of colonial 
affairs. The ordinary European or American 
banking practice can therefore not be applied 
without modification to the incidents of colonial 
development. More latitude must be given on 
the one hand, while new means of obtaining abso- 
lute security must be devised. 

In colonies where savings banks have been 
established, the great problem is how to make 
an investment of their money in such institutions 
sufficiently attractive to the natives, in order that 
the funds thus accumulated may be utilized in 
the development of industrial undertakings. In 
most undeveloped countries the money-lender 
confronts the producer in a hostile attitude, seek- 
ing to obtain an extortionate rate of interest and 
seizing all lands he can bring under his control 
through forfeiture. It is one of the principal 
duties of a civilized colonial policy to bring about 
harmonious relations between colonial capital 
and colonial industry, by inducing the owners of 



capital to realize the solidarity of all economic 
life. Capital from the mother country can be 
successfully enlisted in colonial enterprise only 
through the establishment of institutions which 
command the confidence of the fiscal centers. 
The credit system of a colonial empire must be 
an organism in which all parts are inter-related 
and are subservient to the same purpose the 
development of economic life throughout the em- 
pire. All the individual members of this organ- 
ism must be kept under strict control, subject to 
the watchful criticism of their associates and of 
the administration. These purposes will be more 
readily attained if the colonial banks have their 
central office in the mother country. In this 
manner will they become more conscious of their 
membership in the imperial financial system and 
be brought more directly under the tonic influ- 
ence of uncompromising business principles. 
They will also be withdrawn from the sphere of 
local influences which very often attempt to use 
the credit institutions for purposes of unsound 
speculative dealings. A colonial banking insti- 
tution should not be dependent upon any one cul- 
ture or interest, and it should embrace in its 
operations a sufficient territorial basis to enable 
it to resist a depression in any local industry or 
branch of agriculture. 

French Colonial Banks. French colonial banks 
were originated in the sugar growing colonies 
immediately after the abolition of slavery. As 
the plantation industry had through this social 



reform been placed in a very critical position, it 
was felt that in addition to the indemnity which 
was paid the planters by the government, further 
steps should be taken to protect their economic 
existence. In consideration of the greatly in- 
creased money expenditure in the management 
of plantations it was held advisable to establish 
credit institutions in all the sugar colonies. Con- 
sequently, by the law of July n, 1851, colonial 
banks were organized in Martinique, Guade- 
loupe, and Reunion. The banks of Guiana and 
of Senegal were established a few years later. 
The organization of these colonial banks is based 
on the principle that they are semi-public insti- 
tutions. The treasurer of the colony is cx-officio 
a member of the council of administration, and 
the director (president) of the bank is appointed 
by the president of the Republic upon nomina- 
tion by the minister of finance. No dividends 
can be declared without the approval of the min- 
ister of finance represented by the governor of 
the colony. 

The operations of these banks comprise the 
general exchange and discount business, with the 
limitation that loans are to be for no longer than 
four months and that two signatures must be 
taken. The note circulation must not surpass 
three times the metallic reserve held by the bank. 
The most interesting function of the banks in the 
sugar growing colonies is the granting of agri- 
cultural loans. Upon application for a loan the 
probable value of the crops is determined by an 

1 88 


expert and a sum not to exceed one-third of the 
value thus determined is then loaned to the 
planter. While this part of their business was 
one of the principal reasons for organizing the 
banks it has proved very dangerous to their sta- 
bility. As these colonies are almost entirely 
given to sugar culture, a failure in the sugar crop 
is a serious blow to the credit institutions. They 
have, as a matter of fact, been on the verge of 
insolvency for the last twenty years, although it 
must be said that just at the present they are 
beginning to show signs of greater prosperity. 
Very often the bank administration has been too 
lax; loans were extended after the likelihood of 
payment had become questionable. It was also 
found that agricultural loans had to be made for 
a longer period than the four months provided 
for in the statutes. 1 As a result of all this, the 
colonial governments have often been called upon 
to lend their assistance in order to maintain 
the credit of these institutions. In order to 
strengthen the old colonial banks it has been sug- 
gested that they should be united into one insti- 
tution having its home office at Paris. In this 
way local influence would lose its power and the 
undue extension of loans would become less fre- 
quent; moreover, the risks of the institution 
would be distributed over a wider area so that 
its credit would not receive too severe a shock, 
even though there should be a complete crop 

x The Bank of Reunion weakened itself by trying to protect 
the Credit agricol et commercial against bankruptcy in 1892, 



failure in any one of the colonies. Moreover, 
it seems highly advisable to reorganize these 
banks so as to separate entirely the transactions 
of commercial and of agricultural credit. 

The bank of Indo-China was founded in 1875. 
It also is a bank of issue, discount, and agricul- 
tural loans. Its capital is at the present time 
24,000,000 francs, while that of the older banks in 
the sugar colonies is in no case more than 3,000,- 
ooo francs. In its agricultural loan system this 
bank has worked through the village communities. 
The communes apply to the agents of the public 
administration for permission to take up a loan; 
if the latter endorse the application the loan is 
made, but the government becomes responsible 
to the bank as a guarantor. The Bank of Indo- 
China has its head office at Paris and it has estab- 
lished branches in the larger towns of Indo- 
China, as well as in Pondicherry, Hongkong, and 
New Caledonia. It is planned to make this bank 
an efficient representative of French capitalistic 
interests throughout the Orient. The govern- 
ment has a control similar to that exercised over 
the older colonial banks, upon which the organi- 
zation of the bank of Indo-China is in part mod- 
eled. The bank of Senegal, which, after its 
establishment vegetated for several decades, has 
recently been transformed into a powerful insti- 
tution under the name of the Bank of West 
Africa. The general expansion of commercial 
transactions and the construction of extensive 
public works rendered such a change necessary. 



The new bank has a capital of 1,500,000 francs, 
its chief office is at Paris and it has established 
branches at various important commercial points 
in French West Africa. 

The Bank of Algeria. The bank of Algeria 
has of all colonial banks the most instructive his- 
tory. It was founded in 1851 as a bank of issue 
and discount, with 3,000,000 francs capital, and 
with a charter period of twenty years. The state 
advanced to it 1,000,000 francs at an interest of 
3 per cent. The capital was increased to 10,000,- 
ooo francs in 1867, and to 20,000,000 in 1880. In 
the latter year began the critical period of the 
bank. On account of the devastation caused in 
the French vineyards by the phylloxera, a great 
future was prophesied for the viticulture of 
Algeria. There was, moreover, a general move- 
ment of expansion in Algerian agricultural indus- 
try. The doubling of the capital of the bank 
was undertaken very largely with a view to 
enable that institution to grant liberal credit to 
agricultural enterprises. At the same time local 
banks (comptoirs d'cscompte) were established 
throughout Algeria, so that by 1899 there were 
twenty-five of these institutions. The bank of 
Algeria made personal loans to agriculturists 
either directly or through the mediation of these 
local banks. 1 As the loans were made at the low 
rate of 5 per cent., and as they were liberally dis- 

1 Real estate loans were not permitted under its charter ; 
for this purpose there existed the Credit fonder et agricol de 



tributed, a great impetus was given to agricul- 
ture, as is shown by the fact that the area of the 
vineyards increased from 1880, when it comprised 
17,000 hectares, to 80,000 hectares in 1886, and 
to 160,000 hectares in 1902. But while the effect 
upon the development of viticulture was certainly 
excellent, the bank itself suffered severely. It 
had to break the letter and spirit of its statutes, 
in accepting the unsecured personal paper of agri- 
culturists, and in exceeding the ninety days dis- 
count limit imposed by the charter. Moreover, 
the local banks borrowed money most recklessly 
from the central institution; thus, for instance, 
the bank of Philippeville, with a capital of only 
100,000 francs, negotiated paper amounting to 
1,500,000 francs at the bank of Algeria. As the 
vineyards did not succeed as rapidly as had been 
hoped, the trouble of the bank soon became acute. 
New loans were made in order to save the old 
ones, and as the bank tried to protect itself 
through expropriation of its debtors, it found 
itself finally in possession of a domain of real 
property estimated at its lowest value at 10,000,- 
ooo francs. In 1892, the bank carried more than 
22,000,000 francs of overdue paper. When in 
1897, the renewal of the charter of the bank was 
asked for, its condition attracted much public 
attention. After the bank had arranged its 
affairs, sold its domain, and again placed itself 
upon a secure footing, the law of July 5, 1900, 
renewed its charter for twenty years and imposed 
certain modifications of its organization. Stricter 



safeguarding of the resources of the bank was 
provided for, and absolute solvency with regard 
to all demand obligations of the bank was insisted 
upon. The circulation of the bank is not to 
exceed 150,000,000 francs and is secured by a 
metallic reserve and by the general assets of the 
bank. It was provided that four new branches 
should be established by the year 1915 and that 
the chief office of the bank should be removed to 

In order to provide for an agricultural credit 
system in Algeria the law of July 8, 1901, estab- 
lished a number of land banks (caisses rcgionales 
de credit agricol) . These banks are mutual credit 
institutions and in connection with them agricul- 
tural societies have been formed in the various 
localities. The societies endorse the paper of 
their members and in this manner procure loans 
from the land banks. The capital of the latter 
institutions is supplied partly by stock subscrip- 
tion, partly by savings deposits, and partly by a 
grant of the state, consisting of 3,000,000 francs 
advanced by the bank of Algeria. Numerous 
land banks were established in 1901 and 1902, and 
there was a great scramble for participation in 
the division of the 3,000,000 francs. The system 
is still on trial and it remains to be seen how care- 
fully the local agricultural societies will judge of 
the credit to be allowed their individual members. 

Outside of the direct control which the French 
government exercises over the colonial banks 
through the nomination of the director, there is 
13 193 


also established a commission for the control of 
colonial banks which has its seat at Paris and 
which conducts an elaborate bank inspection ser- 
vice. In general it may be said that the French 
colonies do not as yet have sufficient credit facil- 
ities, and that especially the field of colonial sav- 
ings banks is neglected. The old colonial banks 
are not permitted to pay interest upon deposits 
and, while the bank of Indo-China has this power, 
it has not made use of it for the establishment 
of a savings department. On the other hand, the 
French banks have struggled valiantly with the 
problem of providing agricultural credit, and 
while they have not entirely succeeded in solving 
this very difficult problem of colonial adminis- 
tration, they have at least shown how great an 
impetus can be given to agricultural development 
by grants of credit, and that even under the most 
unfavorable circumstances, in monoculture col- 
onies, at times of great industrial depression, 
banks of agricultural credit have at least been 
able to maintain themselves. Considering the 
great thrift of the French people, the interest they 
take in colonial development, and the readiness 
with which they advance capital for colonial 
enterprises, it will be apparent that, as the details 
of the mechanism for agricultural and industrial 
credit are perfected in the French colonies, there 
will come into existence an admirable system for 
supporting colonial development. 

British Colonial Banks. The British colonies 
are provided with a complete banking system. 



There are about thirty powerful banking corpo- 
rations, with their head offices in London, operat- 
ing in the self-governing colonies, in the tropics, 
and in the Orient. 1 In the individual colonies 
there are local banks as well as an efficient sys- 
tem of governmental savings institutions, sup- 
plemented by post-office banks in some of the col- 
onies. Most of the British colonial banks outside 
of India are banks of issue. The only side on 
which the British system is not well developed 
is the granting of agricultural credit. While 
land banks exist in the self-governing colonies 
and in some of the West Indian colonies, their 
absence is very much felt in such dependencies as 
India and Ceylon. 

The Colonial Bank, with a head office in Lon- 
don and fifteen branches in the colonies, consti- 
tutes the principal credit agency for the British 
West Indies and British Guiana. Some of its 
branches have even invaded the French colonies. 
The Colonial Bank confines itself strictly to the 
business of a bank of issue and discount ; it does 
not engage in agricultural loans nor does it have 
a department for savings deposits. In tropical 
Africa, there has recently been established the 
Bank of British West Africa, which, with its vari- 
ous branches, is to represent British capital and 
credit on the West African coast. The South 
African banks which have their head office out- 
side of Cape Colony issue notes on a basis much 

1 Their total capital in 1902 was 39,057,000; their assets 



like that upon which the American national bank 
system rests; securities are deposited with the 
government which then furnishes notes to the 
banks of issue. A number of these banks have 
extended their operations into the colonial regions 
lying north of the Transvaal. Thus the Bank of 
Africa has branches in Portuguese East Africa 
and in Rhodesia, and the African Banking Cor- 
portation extends its dealings to Beira and Salis- 

The banks operating in India may be divided 
into three classes. There are, first, such institu- 
tions as the National Bank of India and the 
Chartered Bank of India, Australia, and China, 
which are really international corporations oper- 
ating throughout the Far East, with branches in 
every commercial town of the first importance. 
The second class of Indian banks are the three 
great presidency banks, of Madras, of Bombay, 
and of Bengal. These banks were deprived of 
the right of issuing paper currency in 1861, when 
the government took away this privilege out of 
a desire to add to its revenue. Though they 
passed through a severe crisis they have suc- 
ceeded in maintaining their importance and power 
as financial institutions. The third class are the 
government savings banks which gather up the 
savings of the Indian people. India lacks, how- 
ever, a system of land banks and a scientifically 
developed agricultural credit. As a matter of 
fact there exists a complete divorce between 
capital and land in India. An Indian peasant 



has to pay interest rates as high as 24 per cent, 
or even more for the money advanced him by the 
professional money-lenders, while the savings 
banks pay only three per cent. This great dis- 
crepancy in interest rates is an indication that 
the government has not provided a legitimate 
and regular intermediary between credit and the 
agricultural class. 

In Egypt the solution of this problem has been 
attempted. In 1899 the National Bank of Egypt 
began, as an experiment, to make advances to 
agriculturists in certain districts. In the follow- 
ing year these operations were extended to ten 
districts and nearly 9,500 loans amounting to 
137,781 were made. The interest rate was 
fixed at 10 per cent., of which I per cent, went to 
the local agents as a commission, while the re- 
maining 9 per cent, covered the expenses, profit, 
and losses of the bank. As this experiment 
proved successful, there was established in 1901 
a National Land Bank, the capital of which was 
furnished by the National Bank of Egypt and by 
a London firm. In 1904 this bank had loaned 
out over two million pounds, at an interest of 9 
per cent. The Egyptian fellah has for centuries 
groaned under the scourge of the money-lender. 
Even under the most favorable circumstances 
the interest exacted was about 15 per cent. 
Usually it was agreed that the borrowed money 
was to be repaid in equal installments, thus a 
loan of 100 would be repaid in five annual in- 
stallments of 30 each. In such a case it is diffi- 



cult for a land bank to offer relief, because the 
money-lender insists upon his annuity contract, 
which he does not allow to be commuted at a rea- 
sonable rate. Although the Egyptian peasants 
were originally suspicious of the land bank, they 
soon discovered that they could get money from it 
at far better rates and on easier terms than for- 
merly. They consequently have begun exten- 
sively to patronize the public institutions of 

The Bank of Java was founded in 1820 with a 
capital of 6,000,000 florins, which has remained 
unchanged until the present time. The bank fur- 
nishes the notes in circulation in the Dutch East 
Indies. Working in harmony with the Bank of 
the Netherlands, in Holland, it has succeeded in 
maintaining the parity of its notes and of the 
silver currency of Java with the value fixed by 
the gold exchange standard, since 1875, when it 
was first entrusted with this task. In 1902, it 
was carrying on the vast operation of providing 
a stable currency for the Dutch possessions upon 
the narrow gold reserve of 8,110,000 florins. Its 
silver reserve at the same date was 5,213,600 
florins. Confining itself to the ordinary lines of 
banking business, it has none of the features of 
an agricultural bank. But the native cultiva- 
tors are protected, as the money-lenders are 
strictly controlled by the government, and the 
laws do not allow them to oust the natives from 
their land. 

From the experience thus far gained in colonial 


administration, it seems clear that a special 
organization must be given the credit and bank- 
ing systems in the colonies. A bank confining 
its operations to a single locality will not suc- 
ceed as well in the colonies as it may in a well 
developed country, which has more diversified 
interests. Moreover, a large corporation, known 
in the financial centers through direct personal 
contact with the leaders of finance, has far greater 
opportunities for obtaining funds for its pur- 
poses than are at the command of a purely local 
institution. While of course all the ordinary 
parts of the business of banking are transplanted 
to the colonies, the operations of discounting, of 
exchange, and of issue assume a different char- 
acter under the new conditions. Men and enter- 
prises are to be judged less according to fixed 
standards than in an older country; far greater 
latitude in the grant of credit is therefore neces- 
sary. The business of exchange plays a more 
important role in the colonial bank, on account 
of the comparatively unsettled condition of the 
colonial currency. One principle that seems to 
stand out clearly from the experience of France 
is that, while it is desirable to establish institu- 
tions of agricultural credit, they should be sharply 
distinguished from the business of general bank- 
ing. The validity of agricultural credit is so 
difficult to determine according to merely com- 
mercial rules that it should be undertaken only 
by an institution that gives all its attention to 
the gauging of probable agricultural values. 



Colonial banks have been successfully utilized 
for the purpose of providing a currency. The 
metallic reserve upon which this currency rests 
should certainly not be less than one-third of the 
note-issue the rule in the French colonies. The 
adoption of the United States banking system, 
which is contemplated in the Philippine Islands, 
and for which there is a precedent in the experi- 
ence of Cape Colony, would seem to hold out a 
fair promise in new lands, because while it per- 
fectly secures the issue, it relieves the bank from 
the necessity of holding a large reserve in coin 
and thus tying up the circulating medium. 



United States Commission on International Exchange. 
Report on the Introduction of the Gold-Exchange Standard 
into China, etc. Washington, 1903. JENKS, Report on Ori- 
ental Colonies. Ch. 2. CONANT, C. A., Special Report on 
Coinage and Banking in the Philippine Islands. Washing- 
ton, 1901. Report of the Commission on the Indian Cur- 
rency (Herschell Report). Reprinted at Washington, 1893. 
Report of the Straits Settlements Currency Committee. 
London, 1903. 


BLANCAN, A., La Crise de la Guadeloupe. Paris, 1904. 
BRUNEL, L' Etat et 1'individu dans la colonisation frangaise. 
1898. Ch. 8. CHALMERS, R., History of Currency in the 
British Colonies. 1893. CONANT, C. A., "The Currency of 
the Philippine Islands." Ann. Am. Acad. 20:44. CO- 
NANT, C. A., "The Future of the Limping Standard." P. S. 
Q. 18:216. DENIZET, P., Les Banques coloniales. Paris, 
1899. FISCHER, E. S., "The Expansion of American Bank- 



ing in the Far East." Bankers' Mag. New York. 64 : 19. 
DISLERE, Traite de legislation coloniale. I, 767-827.- 
FARRER, Lord, Studies in Currency. London, 1898. Ch. n 
and 12. FRANCONIE, J., "Transformation des banques colo- 
niales." Q. D. C. 13 : 278. GIRAULT, A., Principes de col- 
onisation et de legislation coloniale. 576-595. HEYN, O., 
Indische Geldwahrung. Berlin, 1904. HIGNETTE, A., Le 
credit dans les colonies sucrieres franchises. Paris, 1901. 
JAIS, M., La Banque de 1'Algerie et le credit agricol. Paris, 
1902. KEM MERER, "A Gold Standard for the Straits." Pol. 
Sc. Qu. 19:636. PETIT, E., Organisation des colonies 
franchises. I, 619. LE MYRE DE VILERS, "La crise de 
1'argent en Indo-Chine." Q. D. C. 15 : 8. PEEZ and RAUD- 
NITZ, Geschichte des Maria Theresien-Thalers. Wien, 1904. 
PROBYN, L. C, Indian Coinage and Currency. London, 
1897. ROUGIER, Precis de legislation et d'economie colo- 
niale. Paris, 1895. 174-184. 




The expansion of national commerce was the 
original motive of colonizing activities, and even 
to the present time the English colonial move- 
ment, especially in the tropics, is centered about 
commercial interests. These interests have been 
so clearly preponderant that political methods 
and institutions have been molded with prime 
regard to commercial policy. Commercial or- 
ganization has remained supreme, and political 
institutions must adapt themselves to it. For 
this reason, British colonial policy has always 
favored local autonomy; and the creation by the 
home government of a general uniform system 
of legislation to which all colonial activities 
would have to conform, will remain impossible 
as long as British commercial interests are active 
and vigorous. Thus the establishments of Great 
Britain in India and the Far East, as well as in 
tropical Africa, have been governed primarily 
from the point of view of commercial develop- 
ment, and freedom of commerce has been the first 
consideration. It is a mistake made by some of 
the other powers, into which even some sections 
of the British public are in danger of falling, to 



believe that commercial enterprise can be cre- 
ated and upheld by purely political methods. 
This undue emphasis of political action goes so 
far that many contemporary discussions of colo- 
nial administration neglect entirely those natural 
methods of building up commercial relations, 
upon which, after all, the prosperity of any colo- 
nial undertaking must rest. 

The organization of commerce in the tropics 
requires concentration of effort in large business 
houses. Large stocks have to be carried, long 
credits given, and a multitude of agencies estab- 
lished. Reverses in one part of the field of activ- 
ities have to be made good by successes in others. 
For these reasons smaller houses of limited cap- 
ital will find it difficult to engage successfully in 
commerce in the tropics, and the tendency will 
be, as it has been in the past, to have this business 
carried on by powerful and well-established 
houses or corporations. Of prime importance in 
gaining or holding colonial markets is that fund of 
traditions and experience which is everywhere a 
most valuable part of the capital of a commercial 
house. Each agency, each branch house, and 
every central office, must become the repository 
of information upon the methods of trade, the 
character of customers, and the kinds of goods 
wanted. In this matter the public administration 
can materially assist the merchants by institutions 
which investigate the commercial and industrial 
resources of the colonies and the products which 
may profitably enter into national commerce. 



Such information is provided, for instance, by the 
Imperial Institute in London, which issues in its 
"Technical Reports and Scientific Papers" the 
results of investigations concerning the colonial 
materials of commerce. The Committee on Colo- 
nial Economy in Germany does a very useful 
work in gathering data about economic conditions 
and commercial opportunities in the colonial 
world. A similar purpose is subserved by the 
Philadelphia Commercial Museum, which enables 
the merchants of the United States to gain de- 
tailed information as to the products or the wants 
of any foreign or colonial region. 

The older system of soliciting business largely 
through circulars is no longer effectual. Trained 
agents have to be employed, through whom the 
business houses may come into direct contact with 
their customers, and thus have a chance to pre- 
sent their goods to the best advantage and at the 
same time to learn exactly the needs and desires 
of the populations with whom they are dealing. 
The employment of traveling agents is also 
especially important on account of the long cred- 
its which are asked for by the retail merchants 
and middlemen in colonial commerce; personal 
acquaintance with the character of the customer 
alone justifies extending such favors habitually. 
In order to support a more highly developed colo- 
nial commerce, banking arrangements must be 
much more developed, as has been shown in a 
preceding chapter. 

One of the main difficulties of commercial 


houses in the tropics lies in securing and retain- 
ing an efficient and reliable force of representa- 
tives and employees. Commercial service in the 
colonies implies exile from home and from most 
things which make life agreeable. Large salaries 
must therefore be paid, and every possible means 
employed to identify the interest of the agents 
with that of the firm. This is specially difficult 
in the French colonies, where the numerous posi- 
tions in the public administration constantly in- 
vite commercial clerks to abandon their employ- 
ment for an easy and remunerative berth under 
the government. Thus officialism becomes 
doubly a bane to French colonial enterprise. In 
British colonies government places are not so 
numerous, and the rich commercial houses are 
able to attract their servants to themselves 
through liberal payment. The personnel of a 
German house dealing beyond seas is a compact 
hierarchy of clerks and representatives, who leave 
a part of their salary invested in the firm and who 
look forward themselves ultimately to becoming 
members of it. German commerce is most pros- 
perous where there are no German officials, i. e., 
in regions not under the control of the German 
government, such as Hongkong and South Amer- 
ica. The great success of Danish and Belgian 
houses in colonial commerce is also due very 
largely to the fact that the bane of officialdom 
does not weigh on their enterprises. 

As the matter of access to the markets is of 
course essential, the creation of regular shipping 



facilities with reasonable prices ought to be one 
of the first considerations of the colonial admin- 
istrator. To the splendid service of the German 
merchant marine is due the opportunity which 
German industries at present enjoy for placing 
their products in almost any part of the world. 
The United States, too, benefits by this creation 
of a strenuous competition among merchant 
marines, through which very low freight rates 
have been secured for American products shipped 
to Asia and Africa. 

As the European population in the tropics will 
probably for a long time remain very small, it is 
desirable from the point of view of commerce that 
the natives should be led to develop greater and 
more varied needs. The natives in India, with 
their numbers constantly crowding upon the 
limits of subsistence and with their industries so 
little diversified and developed, are, on the aver- 
age, the poorest customers and smallest pur- 
chasers in the civilized world. The Malays of 
the Philippine Islands have more elbow room, 
and apparently they do not lack the inclination 
to provide themselves with the manufactured 
articles produced by Western nations. Even in 
Africa, where nature furnishes abundant food 
and where there is no great necessity of expense 
for dress and habitations, it is found that the imi- 
tative character of the natives leads them, as soon 
as they come in contact with Europeans, to de- 
sire various articles of usefulness and luxury. 
Definite attempts have also been made to increase 



their habitual wants. Thus Colonel Thys has 
attempted to educate the railroad laborers in the 
Congo Free State to a greater variety of wants 
by making them acquainted with more palatable 
food than they have been accustomed to, by giv- 
ing especial encouragement to those who consent 
to wear "full dress," and by having the women 
taught better methods of housekeeping and cook- 
ing. His main purpose, of course, is to make the 
natives work more steadily in order to obtain 
the things which they have learned to desire, but 
the object of developing trade is also incidentally 

Commerce in the colonies can flourish only in 
the absence of all vexatious regulations. When 
a system of police interference and supervision is 
transferred from Germany to Africa, it acts as a 
damper upon all colonial enterprise, and no offi- 
cial fostering can take the place of vigorous pri- 
vate initiative in making the colonies profitable 
to the mother country. In those colonies which 
have a high customs tariff and, consequently, a 
strict system of customs examinations, commerce 
is necessarily subject to many delays and vexa- 
tions which tend to drive it to other colonies 
where conditions are more favorable. The 
astounding development of British commerce in 
Africa and Asia is due in no small measure to the 
liberal manner with which the English have fol- 
lowed out the policy of free trade in all their colo- 
nial dependencies. Entrepots of commerce of such 
importance as Hongkong and Singapore could 



never have been created on any other basis. And 
yet at the present time a strong current of opinion 
is setting towards a different system under which 
it is to be attempted to develop colonial commerce 
through artificial political arrangements. The 
general plan upon which this policy is based is 
that certain territories shall be preempted in be- 
half of the commerce and industry of a certain 
country, and that, as soon as treaty obligations 
and general considerations allow, a wall is to be 
erected high enough to discourage commerce with 
other nations. This policy, which has been fol- 
lowed by France, has been crowned with appar- 
ent success, inasmuch as the trade of certain colo- 
nies with the mother country has relatively 
increased; and there are therefore found many 
advocates of such a policy even in the United 
States, Germany, and Great Britain, who would 
fain imitate the method which has given to 
France the practical monopoly of the trade in 
most of her colonies. But when later we shall 
investigate the conditions in these colonies more 
in detail, we shall find that the absolute increase 
in commerce and prosperity is not what could 
reasonably be expected. While the mother coun- 
try has gained, the general prosperity of the 
colony has suffered, because it has not been per- 
mitted to unfold its commercial relations in a 
natural manner. Transit trade is interfered with 
by the high rates of customs duties, artificial 
boundaries have to be watched by an expensive 
customs service, and the colony in the end pays 


dearly for the advantages which the mother 
country receives. 

When we consider the total volume of colonial 
trade we shall find that while it constitutes an 
important item in the world's commerce, it is not 
by far important enough to allow us to place it 
ahead of the commerce between independent 
nations, so as to neglect the latter or interfere 
with it with the purpose of developing colonial 
trade. In 1903 the goods imported into the 
United Kingdom from the British possessions 
were valued in round figures at 113,000,000. 
The imports from foreign countries were 428,- 
000,000; the exports from the United Kingdom 
to the British possessions, 119,000,000; to for- 
eign countries 240,000,000. Of the total com- 
merce of the United Kingdom, therefore^ about 
26 per cent, is carried on with the British pos- 
sessions. In France in 1903, the imports from 
the colonies amounted to 433,000,000 Fr., while 
the total import trade was 6,079,000,000 Fr. The 
export trade to the colonies for the same year was 
551,000,000 Fr., the total export trade 5,577,000- 
ooo Fr. The ratio, therefore, which the colo- 
nial trade bears to the whole is about 8.5 per 
cent. There has been a very rapid increase, both 
relatively and absolutely, of French commerce 
with the colonies. Thus French exports to the 
colonies (exclusive of Algeria and Tunis) rose 
from 74,000,000 Fr. in 1890, to 216,000,000 Fr. in 
1903, while foreign commerce with the French 
colonies during this period has been practically 
14 sop 


stationary. A smaller increase is shown in the 
colonial imports into France, which have in- 
creased from 110,000,000 Fr. in 1890 to 154,000,- 
ooo Fr. in 1903. This remarkable expansion is 
due primarily to the adoption of a strictly protec- 
tive policy for most of the French colonies in 
1893, and it also represents in a large measure 
the return upon a very heavy investment of 
French treasure in colonial enterprise. 

The totals of colonial trade statistics, however, 
give us very little real information; it is neces- 
sary to analyze the returns in order to perceive 
their bearing upon national industry. Thus, in 
the first place, the statistics concerning the im- 
ports into the colonies must be carefully distin- 
guished from the exports because the entire ques- 
tion of the effect of colonial trade upon the 
industries in the mother country depends prima- 
rily upon the sources and character of colonial 
imports. But furthermore the quality of the colo- 
nial import trade must be carefully considered, 
because a commerce that is small in bulk may 
nevertheless be of greater advantage to national 
industry than a commerce much larger but differ- 
ent in quality. 

From the point of view of the development and 
prosperity of national industry it is important 
that the exports of the nation should be composed 
largely of manufactured goods, the value of which 
includes as high as possible an amount of labor 
cost. The export of raw material, of coal, of food 
materials, and of machinery used in factories, can- 



not be considered of the highest advantage to the 
industrial life of a manufacturing country, nor is 
it most profitable from a national point of view 
to furnish foreign countries with ships, which 
help to build up their merchant marines. Ana- 
lyzing the export trade of Great Britain with this 
consideration in view, we find that the export of 
raw material, coal, ships, and machinery to for- 
eign countries in 1903 amounted to 48,000,000, 
while the colonies took only 11,000,000 of ex- 
ports in this class. Manufactured goods (exclu- 
sive of industrial machinery and ships) to the 
value of 121,000,000 were sent to foreign coun- 
tries, while those shipped to the British colonies 
were valued at 89,000,000. Only 10 per cent, 
of the exports of British goods to the colonies 
consist of those commodities which the national 
industry derives relatively the least profit from, 
while for foreign countries the figure is 27 per 
cent. It has further been shown that in the for- 
eign trade of Great Britain the export of manu- 
factured goods is declining while that of raw 
material and machinery is increasing. 

Among the exports of articles wholly or 
mainly manufactured, discrimination may be 
made according to the stage of completion. Nat- 
urally, the products which pass through most 
processes at home distribute greater profit among 
more classes, than those which have simply gone 
through the first stages of manufacture. The 
colonial demand takes a relatively higher propor- 
tion of completely worked-up articles than does 



the foreign market. The colonies actually im- 
port a larger amount of the finished product than 
do the foreign customers. Of the manufactured 
goods exported to the colonies, 48 per cent, repre- 
sent articles completed and ready for consump- 
tion, 49 per cent, manufactured articles requiring 
some final process of adaptation or combination, 
and 3 per cent, only articles partly manufactured. 
Among exports of manufactures to foreign coun- 
tries, a much larger proportion of goods (70 per 
cent.) passes through important profit giving, 
labor paying processes abroad. Conversely, in 
regard to imports of manufactures, the colonies 
send partly manufactured goods to the mother- 
country to go through the finishing processes 
there, while foreign nations, in 1903, sent to the 
United Kingdom, 49,900,000 of articles ready 
for consumption or over S l / 2 millions more tlun 
they took of the same classes of goods. Thus the 
dependencies make the intra-imperial commerce 
more valuable by taking from the United King- 
dom the largest proportion of her most profitable 
exports and by sending her the smallest am* .tint 
of the least desired competing products. What 
lends additional importance to the trade with the 
colonies is that not only does it include the most 
profitable items, but it is also the fastest increas- 
ing. While from 1870 to 1903 exports of British 
manufactures to foreign countries have been al- 
most stationary in amount, they have more than 
doubled in the case of the colonies (rising from 
44,000,000 in 1870 to 96,000,000 in 1903). 


The above considerations point to the special 
importance of tropical colonies in affording a per- 
manent market for the regular products of 
national industry. For the self-governing col- 
onies, though they are still good customers of the 
mother country, will not confine themselves per- 
manently to an inferior industrial position, but 
are already beginning to vie with the British 
industries along certain lines of manufacture. 
For an indefinite time to come it is likely that 
economic activities in the tropical colonies will be 
confined almost entirely to the extractive and 
agricultural industries and that manufactures will 
constitute an exceedingly small element in trop- 
ical economic life. Tropical trade is therefore 
relatively of larger importance than its bulk 
would indicate when the latter is compared with 
the sum of international trade, because tropical 
commerce furnishes the population of an indus- 
trial state with food and raw materials, while tak- 
ing from it manufactured goods in the value of 
which labor cost forms an important element. 

An Imperial Customs Union. At the present 
time when Mr. Chamberlain's agitation for closer 
intra-imperial trade relations is attracting so 
much attention, a discussion of colonial commerce 
will naturally gravitate around the problem 
whether the commerce between the mother coun- 
try and the colonies can permanently be fostered 
and increased by political means. Mr. Chamber- 
lain's proposal, which has so far been given to the 
world only in outline, has for its principal article 



the imposition of a differential tariff upon food 
imports into Great Britain, so arranged as to give 
a preference to the self-governing colonies. It 
has likewise been proposed to reduce the tax on 
sugar and tea and to make up the deficit thus 
caused in the revenue by a 10 per cent, tax on 
manufactured goods imported from foreign coun- 
tries. In return for these advantages the colonies 
would be expected to give preferential treatment 
to imports from the mother country, an arrange- 
ment which has already been made by Canada, 
South Africa, and New Zealand. As will be seen 
at a glance and as the drift of the current discus- 
sion proves, the scheme contemplates primarily 
a closer commercial union between Great Britain 
and the self-governing colonies. But though the 
bearings of this policy upon the tropical colonies 
has been given very little attention, it admits of 
no doubt that in the event of Mr. Chamberlain's 
propaganda being successful, an effort would be 
made artificially to control the currents of trade 
with the British dominions in the tropics. As 
the tropical colonies at the present time count for 
nearly one-half of the colonial trade of Great 
Britain, it is difficult to understand the reason 
for almost utterly ignoring them in the current 
discussion. That their commerce is destined to 
become relatively more and more important, is 
clear when we remember the effort of the self- 
governing colonies to build up manufacturing 
industries of their own and to render themselves 
industrially independent. 



The scheme for promoting imperial economic 
union would affect the tropical colonies in a man- 
ner radically different from the results expected 
for Australia and Canada. It is evident that Mr. 
Chamberlain looks entirely to the self-governing 
colonies and to the political advantages which 
may be obtained through such a policy in Great 
Britain itself. But we cannot consider a policy 
mature, which under the avowal of furnishing a 
new basis for imperial economic relations shows 
no attempt seriously to deal with the special char- 
acter of economic life in what is in many ways 
prospectively the most important part of the Brit- 
ish colonial empire the tropical dependencies. 
A review of the economic conditions in the British 
colonies will show that they can by no means be 
dealt with upon any narrow principle. So rami- 
fied are their trade relations, so dependent is their 
export trade upon a wide circle of purchasers 
throughout all the nations of the world, that by 
decree to give a totally different direction to their 
current of trade would appear a policy of exceed- 
ingly doubtful wisdom. 

In 1903 the imports into British colonies from 
the United Kingdom amounted to 120,000,000, 
while the imports from foreign countries 
amounted to 161,000,000. The exports of the 
colonies to the United Kingdom amounted in that 
year to 108,000,000; to foreign countries, 171,- 
000,000. In 1903 the percentage of the share of 
the United Kingdom in the total imports of the 
individual colonies was as follows : 



British India 65% 

Straits Settlements 10% 

Ceylon 28% 

Mauritius 24% 

British West Indies 31% 

Natal 56% 

West Africa 51% 

Australia 52% 

Cape Colony 62% 

British North America 24% 

The percentage of British exports into Canada 
fell from 50 per cent, in 1871 to 24 per cent, in 
1903; in Cape Colony from 83 per cent, in 1871 
to 62 per cent, in 1903. In Australasia it rose 
from 39 per cent, in 1871 to 54 per cent, in 1903. 
Upon the whole, Great Britain has been losing 
relatively in the self-governing colonies, but the 
exports to India show an increase, and the abso- 
lute gain of general trade has been considerable. 
This partial relative decline is due of course to 
the fact that colonial trade relations have been 
more fully developed, and that countries like 
France and Germany, which formerly did not 
enter into the world trade with any effect of seri- 
ous competition with Great Britain, have now 
begun to claim their share. While the export of 
British goods to the United States has been fairly 
stationary, there has been an increase of exports 
to the protected states of Europe; and the total 
export of manufactured goods to these two re- 
gions about equals that to the British colonies 
and dependencies. 

On the whole, Great Britain has no reason to 


complain of the amount of colonial trade which 
falls to her share. 1 At first view we should ex- 
pect that the figures would show a large excess 
of colonial imports into Great Britain over the 
exports from the mother country to the colonies, 
for the investments of British capital which have 
been made in the colonies are calling for heavy 
interest payments. In fact, however, in the last 
few years Great Britain has exported more to the 
colonies than she has imported from them. 2 This 
apparently anomalous condition is due to two sets 
of facts. Several of the colonies are still import- 
ing the original outfit of their industrial develop- 
ment, and have not yet begun to repay interest 
and capital to the mother country. But more 
important, most of the colonies which show an 
excess of imports from Great Britain, export very 
heavily to other nations from whom again Great 
Britain makes purchases, thus restoring the bal- 
ance of trade. In 1903 the following colonies 
showed an excess of exports to Great Britain: 
Canada the largest New Zealand, Ceylon, the 
Straits Settlements, Nigeria, Egypt, and New- 
foundland. The following showed an excess of 
British imports: India, South Africa, Australia, 
the West Indies, and West Africa. A considera- 
tion of the commerce of these various colonies 
will show how important is the round-about trade 

1 Nor are general trade relations unfavorable to her. Thus 
in 1903, Germany's exports to the entire British Empire were 
60 millions, but her imports from the Empire were 66 

* From uve to ten million pounds sterling per annum. 


with other nations and also what a radical dis- 
placement of commercial activities would have 
to be effected in order to force the trade of these 
dependencies into new channels. 

Indian Commerce. In India external com- 
merce is of far less importance relatively to in- 
ternal industry and commerce than in any other 
great country. This fact is accounted for not so 
much by the relative amount of that commerce 
but by the fact that India does not, like other 
countries, habitually send the surplus product of 
her general national industries to foreign lands. 
On the contrary, Indian industries may be divided 
into those which primarily supply the local de- 
mand for food and clothing and those which sup- 
ply the export trade. The excessive poverty of 
the masses of the Indian people sets very narrow 
limits to their economic wants. As the natives 
are mostly agriculturists, they satisfy their ordi- 
nary needs without the intervention of any trade 
at all. In addition to the food which they raise, 
they purchase a little salt and some cotton goods, 
but ordinarily nothing beyond this. As in Japan 
before the restoration, and as in China even at the 
present time, the vast bulk of the population leads 
a self-centered economic life, producing what it 
needs, and not looking to foreign trade for a sup- 
ply of necessaries and luxuries. 

The relative importance of the food-supplying 
industries in India is shown by the fact that five- 
sixths of the cultivated area of India is used for 
food production, while one-sixth only is used for 



the production of raw materials for manufactures. 
But though in average years about two to three 
per cent, of the total food product is exported, the 
chronic famine distress which has prevailed in 
India during the last decade makes it clear that 
this export does not constitute a true surplus. It 
is indeed an alarming sign of the great poverty 
of India that at such times food should be sold 
abroad which is so absolutely necessary at home. 
The ordinary food grains of India, millet and 
pulse, are not exported at all. Wheat is raised 
only in Northern India and in normal years con- 
siderable export trade takes place ; but it is sub- 
ject to great fluctuations and in some years 
recently it has fallen to a very low average. Of 
food materials rice is by far the largest item on 
the export list. Eastern Asia and the Philippine 
Islands have been the best customers for this 
product in recent years. But in India itself rice 
is not the food of the common people except in 
Burma ; it is used only by the wealthier classes. 

From all this it is apparent that India cannot 
be looked upon at present, considering its large 
and increasing population, as a country in which 
it is advisable artificially to encourage the expor- 
tation of food. A British preferential duty on 
food materials in favor of the colonies might 
therefore be directly harmful to the Indian people 
as a whole, no matter how much it may be desired 
by the exporting merchants. It has been argued 
that famine is due, not to a lack of food, but to 
the penury of the rural population which is not 



able to pay even a moderate price and that for 
this reason food export might safely be encour- 
aged. Yet this view does not entirely commend 
itself to acceptance as the further raising of the 
price would certainly cause distress among wider 
circles. What India needs is a greater supply of 
food, not a larger market ; better means of irriga- 
tion and production rather than added facilities 
for sale. 

India is the largest sugar producing country of 
the world, but the methods of manufacture are so 
primitive that the grades produced are not sought 
for in the export trade. Indian sugar is entirely 
consumed at home and it satisfies the ordinary 
demands of the native population. The wealthier 
classes and the foreigners, however, buy sugar of 
finer quality. This was formerly furnished 
largely by Mauritius, but with the growth of the 
beet sugar industry in Europe, cane sugar was 
nearly forced to yield in the competition. In 1899 
the Indian government imposed a countervailing 
duty upon bounty-fed sugar. This was done for 
imperial reasons rather than for the protection 
of the Indian sugar industry. The demand for 
refined sugar could be supplied by the latter in 
neither case ; it was the cane sugar of Mauritius, 
and the sugar refined at Hongkong that was 
helped by this preferential duty. The Indian 
sugar industry could be improved only by intro- 
ducing more modern methods of production. 
Even with the countervailing duty, the Austrian 
sugar producers were able to sell as much as 225 



million pounds of sugar in British India in the 
year I9OI-2. 1 The increase in the duty in 1902 
nearly cut off the beet sugar import. But the 
remission of duty following upon the Brussels 
Conference of 1903, has renewed the extensive 
import of the Continental product. 

The products which constitute the real and con- 
stant strength of Indian export trade are the fol- 
lowing: raw cotton, cotton yarn, and coarse cot- 
ton fabrics, jute, tea, rice, seeds, skins, hides, and 
opium. The raw cotton of India is far inferior in 
staple and quality to that produced in the United 
States and Egypt. It has therefore ordinarily no 
market in Great Britain, and is at present exported 
chiefly to Japan, where it is in demand on account 
of its cheapness. 2 Indian cotton yarns are ex- 
ported almost entirely to China. It is evident 
that it would take the force of a great number of 
decrees to induce British manufacturers to use 
Indian cotton unless such improvements were 
made in Indian agriculture as would entirely 
transform the quality of the product. The sug- 
gested imperial union of free commerce would, 
under present conditions, be powerless to give a 
British market to so important an export as 

*In the fiscal year 1902-03 the total import of sugar was 
3,180,000. Of this Mauritius furnished 1,265,000, Austria 
561,000, Hongkong 380,000, and Java 314,000. 

a ln 1902-3 the value of raw cotton exported to Great Britain 
was only 627,000 ; Italy and Belgium each imported twice 
as much from India, and Japan 2,650,000. The total export 
of raw cotton to foreign countries was sixteen times as large 
as that to Great Britain. Of the total exports of raw cotton 
in the seven years preceding 1904, Great Britain took only 
one-seventeenth part, while Japan took fully one-third. 



Indian cotton. This product can be exported 
from India without any of the unfavorable conse- 
quences which follow upon the exportation of 
food-stuffs, but it is precisely the product which 
the manufacturers of Great Britain do not want. 
Next to cotton, jute, raw and manufactured, is the 
most important product exported from India. 
The leading purchasers are the United States, 
Australia, Argentina, Germany, and France. In 
this case the United Kingdom takes about one- 
fourth of the total largely for reexport. 

Indian tea finds its market almost entirely in 
Great Britain where, together with the product 
of Ceylon, it is displacing the Chinese leaf, so as 
entirely to modify the trade balance between 
Great Britain and China. Between the years 
1875 an d I 93 th e British tea import has shifted 
almost entirely from China to India and Ceylon. 
In 1903 the value of Indian tea imported was 5,- 
355,000. The trade has, however, been endan- 
gered by the increase of the British tea tax to 8d. 
a pound in 1903, which has raised the price of tea 
so much that substitutes may be resorted to. 
The other Indian imports into Great Britain, the 
value of which exceeds one million sterling per 
year, are wheat, raw and dressed skins, jute, rice, 
and linseed. Indigo, formerly one of the richest 
products of India, is now exported only to the 
value of 717,000, of which Great Britain takes 
less than half. In several lines, other nations are 
better consumers than Great Britain, thus Japan 
takes more hides, the United States more skins 



and* more gunny cloth; of sesame-seed France 
takes 1,1*57,000, Great Britain nothing. Russia 
is by far the poorest customer of India, taking 
an infinitesimal part of the total exports ; in Rus- 
sia most Indian products are subject to heavy im- 
port duties; and the tea trade has been almost 
destroyed by the imposition of a tax of 250 per 
cent, ad valorem. When we look at the export 
trade of India we will be struck by the evenness 
of its distribution among the leading countries 
of the globe. 1 

As far as imports into India are concerned it is 
hardly conceivable that the United Kingdom 
could desire anything better, as she has two-thirds 
of the total import trade, including a practical 
monopoly of the cotton imports. 2 It is therefore 

x The percentages for the fiscal year 1903-4 were as follows: 

United Kingdom 27.1 per cent. 

China (and Hongkong) 11.9 " " 

Germany 9.9 " " 

France 6.6 " " 

United States 6 " " 

Belgium 5.1 " " 

Straits Settlements 4.8 " " 

Japan 5.6 " " 

It will be interesting to compare the percentages of imports for 
the same year : From 

United Kingdom 65. per cent. 

Belgium 4 

Russia 2.9 

Austria Hungary 2.6 

Straits Settlements 2.9 

Germany 3.4 

China and Hongkong 2.3 

France 1.9 

United States 1.5 

Japan 1.5 " " 

8 India buys about 20 million pounds sterling of cotton man- 
ufactures of Great Britain in ordinary years. 



difficult to see how her position could be im- 
proved. Moreover, when we examine the figures 
for several years back we find that they show that 
none of the other powers are gaining to any ex- 
tent upon the United Kingdom in Indian trade; 
on the contrary, their percentage is on the whole 

The table of export percentages shows how cos- 
mopolitan is the trade of India, and it is difficult 
to see what Great Britain would have to gain by 
destroying the export trade of India with Ger- 
many, France, and the United States. As it is, 
the fact that India is free to ue the world's mar- 
ket for her produce, gives her the means to pur- 
chase large quantities of goods from Great Brit- 
ain. The trade relations may be presented 
graphically by the adjoining diagram, which pre- 
sents, of course, only the main current. Great 
Britain sells her manufactured goods to India, 

Great Britain 




iwuid ^ Germany, France 

Food and Raw Materials U. S.. Japan 

and reimburses herself in part by drawing upon 
the products of Germany, France, Japan, and the 
United States, to whom in turn India exports 



heavily. The import trade in British goods is 
strong along all lines, and so well is England's 
position entrenched on account of the fact that 
all the threads of the commercial system are in 
the hands of the British merchants, that it will 
be exceedingly difficult, in fact almost impossible, 
for any other nation to supersede British trade to 
any appreciable amount, so long as the industries 
of Great Britain and her commercial organization 
retain their efficiency. It would be a sign of 
abnormal timidity under such conditions as this 
to take refuge behind an artificial protection cre- 
ated by law. 

A dangerous aspect, from the Indian point of 
view, of the movement for closer imperial eco- 
nomic union lies in the fact that it would still fur- 
ther subordinate the entire life of India to the 
interests of the commercial class and of parlia- 
mentary politicians at home. The principal mat- 
ter in which the British parliament has thus far 
seriously interfered with the Indian economic 
system the cotton duties was determined solely 
in the interest of the British producers with little 
regard for the special needs of Indian economic 
life. On the part of the Indian government the 
entire economic policy of the empire has been 
generally viewed through the eyes of the com- 
mercial class. The cotton duties and excise, the 
countervailing sugar duties, and the adoption of 
the gold standard, all resulted primarily in great 
advantage to the merchants, although these meas- 
ures may also plausibly be defended from the 
15 225 


point of view of the general interests of India. 
Such being the general attitude of the Indian gov- 
ernment, which is carried on with the desire at 
least of governing India in her own interest, it 
can easily be imagined what would happen should 
the center of gravity in the control of Indian eco- 
nomic life be shifted to a tariff-making parliament 
in a distant country, through the realization of 
the scheme of an imperial customs union. Indian 
welfare has already repeatedly been sacrificed to 
the interests of foreign trade which is of compara- 
tively minor importance in her life; but from 
what we know of the actions of national parlia- 
ments when they deal with colonial questions and 
when they deal with tariffs, it is to be feared that 
far greater sacrifices would be imposed upon the 
tropical colonies, which in matters of parliamen- 
tary action are dumb and unresisting. 

As far as outlined at the present time Mr. 
Chamberlain's policy of confining the currents of 
international trade to narrow and strained chan- 
nels, would rob India of the freedom of disposing 
of her export produce in the markets of the world. 
As a matter of fact Great Britain has no equiv- 
alent market to offer for the peculiar products of 
the Indian industries. If any modification of the 
Indian tariff policy is to be introduced it should 
not take the direction of general imperial prefer- 
ence but of greater fiscal independence on the 
part of India, so that a small measure of protection 
might be accorded to certain native industries, 
and that the government might be provided with 



a weapon of retaliation against such outrageous 
attacks on Indian commerce as the prohibitive 
tariffs of Russia. 1 

The commerce of Ceylon is balanced in the 
reverse direction from that of India. In 1903 
Ceylon exported to Great Britain produce to the 
value of 4,356,000, while she imported only 
1,512,000 of British goods. The balance of 
trade with Great Britain is therefore heavily in 
favor of Ceylon. In cotton imports Great Britain 
still holds the primacy, although imports from 
India are increasing, equaling at the present time 
about 40 per cent, of the British import ; and in 
hardware Germany is beginning to compete with 
the British manufacturers. It is natural that Cey- 
lon, being a station on the world's great route of 
travel between China and Europe, should have a 
somewhat more cosmopolitan import trade than 
India. The balance of trade with Great Britain 
is adjusted by way of the latter empire, so that 

a The opinion of the Indian government itself is not tavor- 
able to a policy of preferential tariffs; in an official statement 
of its views on the matter it says : 

"Firstly, that without any such system, India already enjoys 
a large, probably an exceptionally large, measure of the advan- 
tages of the free exchange of imports and exports. 

"Secondly, that if the matter is regarded exclusively from 
an economic standpoint, India has something, but not perhaps 
very much, to offer to the Empire ; that she has very little to 
gain in return ; and that she has a great deal to lose or to risk. 

"Thirdly, that in a financial aspect, the danger to India of 
reprisals by foreign nations, even if eventually unsuccessful, 
is so serious and their results would be so disastrous, that we 
should not be justified in embarking on any new policy of the 
kind unless assured of benefits greater and more certain than 
any which have, so far, presented themselves to our mind." 
Parl. Pap. 1904. Cd. 1931. 



the main current of trade is in this case again tri- 
angular. Ceylon sends tea to Great Britain, 
which country in turn supplies India with manu- 
factured goods, while Ceylon draws her rice and 
other articles of food principally from the neigh- 
boring empire, as is shown by the accompanying 
diagram. It will therefore be seen that a pros- 
Great Britain 



Rice and Cotton 

perous year in Ceylon means a large increase of 
British exports to India. Ceylon at such times 
imports more heavily from India, which is thus 
enabled to make larger purchases of manufac- 
tured goods in Great Britain. 

On account of their character as entrepots for 
international exchange, the two far-eastern col- 
onies of Hongkong and the Straits Settlements 
are peculiarly in need of complete international 
liberty of trade ; both thus far have adhered to a 
regime of absolute fiscal freedom, levying no 
taxes at all upon imports. In 1897 a powerful 
agitation was even begun against the system of 
harbor dues in Hongkong on the ground that they 



interfered with commercial liberty; as a result 
these dues, although not unreasonable at the time, 
were reduced to a merely nominal charge. The 
incident illustrates the alertness of the commercial 
population, which fully realizes that absolute 
freedom of trade is to an entrepot like Hongkong 
a matter of life and death. The great importance 
of these outposts of British trade becomes appar- 
ent when we consider that the external commerce 
of the Straits Settlements alone amounts to over 
60,000,000 annually, and is equal to two-thirds 
that of Canada and fully as great as the entire 
external trade of Cape Colony or of Japan in 1903. 
On account of the limited area of the above two 
colonies their commerce involves a very small ele- 
ment of actual importation, but is composed 
almost entirely of transit trade with Oriental 
countries. Should any restrictive trade policy be 
applied within the British Empire, entrepots such 
as these would suffer enormously, as such a policy 
would certainly result in a diminution of extra- 
imperial trade relations. 

African Commerce. As in the matter of cur- 
rency, so in commerce, East Africa belongs to the 
sphere of India. British East Africa receives 
from that country such imports as rice and cotton 
goods ; its chief exports, ivory and rubber, how- 
ever, go to Continental Europe ; and the balance 
of trade is adjusted by way of India. East Afri- 
can trade relations are therefore very intricate at 
present, although it would perhaps not be very 
difficult to turn more of the export trade to Great 



Britain. The following diagram shows the direc- 
tion of the main trade current between East 
Africa, India and Europe. 

General Commerce 

Great Britain 


Continental Europe 

British East Africa 

Rice, Cotton 

Tropical Africa constitutes a most promising 
field for the future expansion of European and 
American commerce. The natural wealth of cen- 
tral Africa in valuable timber, in animal products, 
rubber, and mining resources, is exceedingly 
great. Up to very recent times European com- 
merce had touched this vast reservoir of natural 
wealth only on the border. The coast belt had 
been fairly well exploited, but the insecurity of 
the interior and the heavy cost of transportation 
made it impossible to extend commercial opera- 
tions to any considerable distance from the sea. 
With the attempt at political occupation made by 
the European nations since 1880, there has also 
come the desire of conquering the commerce of 
the interior regions. At present, however, the 
actual achievement is still comparatively small, 
and when the figures of African commerce are 
reviewed and compared with those of more devel- 
oped and more accessible parts of the world, the 



thought suggests itself that the result does not 
yet justify the heavy expenditure incurred. But 
when we consider the short period during which 
the newer methods of colonial occupation and 
exploitation have been in use, we must concede 
that it would be unfair to base any final argument 
upon the results thus far obtained, and that any 
consideration of African commerce must make the 
large undeveloped resources of Africa the prin- 
cipal basis of its calculations and principles. 
Africa is a promising field for European com- 
merce because the wants and needs of the natives 
are more readily expanded than they are in older 
and more densely settled communities in the 
tropics. Considering the climate of Africa the 
demand for cotton goods is already surprisingly 
strong, and Africa promises to be one of the best 
markets for European cotton manufactures in the 
future. 1 Outside of cotton the most important 

1 In 1903 cotton goods were imported into Africa from 
Great Britain in the following amounts : 

Cape Colony and Natal 1,315,000 

.British West Africa 926,000 

Egypt 2,419,000 

French Africa 880,000 

Portuguese Africa 343,ooo 

Morocco 541,000 

Other regions 347,000 

Total 6^771,000 

The total trade of Great Britain with Africa for 1903 was as 
follows : 

Imports from British Africa (in- 
cluding Egypt) 26,805,000 

Imports from non-British Africa.... 2,595,000 
British Exports to British Africa... 35,546,000 
British Exports to non-British Africa 6,483,006 

Total 71,429,000 

The total trade of Great Britain with Africa is therefore some- 
what larger in amount than that with British India. 



articles of European trade in Africa are firearms, 
powder, and spirituous liquors. Only in the sec- 
ond line come iron manufactures and general 
manufactured goods. In colonies in which large 
public works are being constructed the materials 
for these form a very important item in the im- 

The chief articles of African export trade are 
rubber, palm oil, palm kernels, ivory, cotton, and 
peanuts. The trade in agricultural products out- 
side of Egyptian cotton, is still in its infancy. 
While the natural wealth of Africa seems at first 
sight boundless, it is nevertheless true that in the 
more accessible regions such products as rubber 
and ivory are growing scarce. The natives when 
left to themselves have no conception of the neces- 
sity of replanting rubber vines and trees, nor of 
tapping them in such a manner as to preserve the 
plants themselves. The high price obtained for 
rubber during the past decades has led to the 
wholesale devastation of African rubber forests. 
It has therefore become clear that unless the 
natives can be educated to gather rubber in a more 
careful fashion and to replace by new plantings 
the vines that have been destroyed, one important 
item in the natural commercial wealth of Africa 
will be liable to destruction within a measurable 
distance of time. There is also a growing scarcity 
of ivory, which was formerly one of the chief Afri- 
can products. Palm oil and earth nuts are prod- 
ucts that are easily gathered and do not require 
much cultivation, but the market for these is lim- 



ited and can easily be satisfied by utilizing only 
a comparatively small portion of the African 
resources of this kind. Mining in the tropical 
zone of Africa has not yet been developed on a 
large scale. The existence of important ore de- 
posits is, however, certain, and as the mines of 
South Africa become exhausted more and more, 
there will be a greater pressure toward the in- 
terior of Africa. But the greatest hope of Africa 
lies in the establishment of plantations and the in- 
struction of the natives in methods of productive 
agriculture. These are not only important for the 
preservation of the natural wealth of Africa, but 
they will increase the list of African exports by 
adding everything that the tropical regions can 
produce for the use of the more temperate zones. 
In discussing African commerce it should be 
remembered that the European occupation of 
tropical Africa is of very recent date and has thus 
far not had a deep influence upon the life and cus- 
toms of the people. Spheres of interest were 
carved out without much regard to local condi- 
tions and were given entirely arbitrary and arti- 
ficial boundary lines. Thus West Africa has 
been divided up into a number of colonies whose 
boundaries divide the older kingdoms and trade 
regions into artificial territorial units without his- 
toric traditions or well rounded economic inter- 
ests. As long as freedom of trade and liberty of 
intercourse is maintained the disadvantages of 
such artificial divisions are not" excessive. But 
should the various nations decide to enforce a sys- 



tern of commercial exclusiveness in their respec- 
tive spheres the entire internal trade of Africa 
would be deranged and trade routes would have 
to be built up anew. Such a policy would also 
call for a heavy expenditure for police purposes 
in order to prevent smuggling and other breaches 
of the laws of commerce an expenditure which 
the present volume of African trade would hardly 
warrant. Moreover, any nation which would 
take the initiative in the adoption of the exclusive 
policy would drive from its ports the trade of the 
interior regions, to seek new routes in colonies 
where a more liberal regime obtains. As France 
has come into possession of the entire hinterland 
of West Africa she is, on the whole, in a more 
advantageous position for enforcing an exclusive 
commercial policy; she can control the trade 
from the interior so as to direct it towards her 
own ports. But for Great Britain to adopt an 
exclusive policy in West Africa would be the 
greatest folly, because her trade is so largely 
dependent upon maintaining the routes which 
now lead from the interior of Africa through the 
British colonies to the coast. 

In British West Africa the import trade, espe- 
cially in cotton, is very largely in British hands ; 
the British houses, established first, continue to 
hold the commercial supremacy. 1 Still the gen- 

x Thus in 1903 Great Britain had 73 per cent, of the import 
trade in Sierra Leone and the Gold Coast ; while taking 60 per 
cent, of the exports of the latter, and only 30 per cent, of the 
former colony. The total British imports into British West 
Africa in 1903 amounted to 2,079,000, while the United 
Kingdom took only 936,000 of the exports. 



eral economic progress in the British colonies 
does not compare favorably with that in the 
adjoining French possessions. For, while in the 
Gold Coast imports increased from 900,000 in 
1897 to 2,082,000 in 1903, during the same 
time exports have averaged only about 870,- 
ooo, a condition which can of course not continue 
long. The trade of Lagos has been injured on 
account of the levying of transit dues, which fall 
on the trade from and to French Dahomey and 
tend to drive the interior commerce from the 
Lagos ports. An attempt by legislation to draw 
all of the products of British West Africa to 
Great Britain would not be successful, as even 
now there is no British demand for a large share 
of the West African staples, which are forced to 
seek a market elsewhere. This is true especially 
with respect to palm products. Thus in 1901 
British purchasers required only one-fourth of 
the palm kernels exported from British West 
Africa and Nigeria; the rest was used in the 
manufacture of oils on the Continent. In Nigeria 
Great Britain has an almost complete monopoly 
of the import trade (80 per cent.), a fact due to 
the splendid organization of the Royal Niger 
Company, which displaced practically all foreign 
companies engaged in trade along the Niger 

The trade of the West Indies is peculiar in that 
almost the entire food supply is imported from 
the United States; the produce of the islands, 
sugar and fruit, is also exported chiefly to that 



country. The economic life of the West Indies 
will always be dependent on the United States, 
and the movement to create better communica- 
tions between Canada and Great Britain, and the 
West Indies, cannot seriously affect this natural 
condition. The recently subsidized steamship 
line, which receives annually 40,000 from the 
government and which is to build up a trade in 
fruit to Great Britain, carried during the year 
1903 fruit valued at only about 243,000. The 
greatest difficulty of these colonies lies in the 
fact that they have adhered too long to a system 
of mono-culture, varied only in some islands by 
the introduction of cacao and coffee ; and that to 
a lack of adequate facilities of communication 
there are added tariff barriers between the indi- 
vidual colonies themselves. It would seem that 
the commerce of the West Indian colonies would 
be benefited far more by complete commercial 
liberty than by the imposition of greater restric- 
tions than exist at the present time. 

French Colonial Commerce. Notwithstanding 
the great extent of the French colonial empire 
and the enormous cost to the mother country, the 
external commerce of the colonies is still very 
small when compared with the dependencies of 
Great Britain. The total external commerce of 
the French colonies (including Algeria and 
Tunis) with all countries, according to the most 
recent figures, was 1,582 million francs, or about 
as much as the commercial movement of the 
Straits Settlements alone, and not one-third as 



large as the external trade of India. Of the 
amount given above, the commerce of the col- 
onies with France constituted almost two-thirds, 
or 985 million francs ; while the commerce of the 
United Kingdom with India alone amounted to 
1670 million francs. By far the largest share of 
the above commerce is credited to Algeria (633 
million francs, of which 526 million francs is 
French commerce). The total imports of Algeria 
from France in 1903 amounted to 289 million 
francs, a sum which is equal to about 5 per cent, 
on the total outlay of the French government to 
date in behalf of Algeria. If we take the profit 
on export trade to be about 20 per cent., the actual 
return received by the French nation in this case 
in the way of commerce is i per cent, on the cap- 
ital invested. The entire external commerce of 
the French colonies, outside of Tunis and Algeria, 
is at present about 200 million francs less than 
that of Egypt alone. 

There are numerous reasons for this compara- 
tively slow development of French colonial com- 
merce. The French colonies are overburdened 
with officials and with administrative organiza- 
tion. The expense involved is itself a drawback, 
but an even greater disadvantage to colonial 
enterprise is found in the fact that a career in the 
public administration is far more attractive than 
the arduous work of private business, and that 
consequently the clerical employees and agents 
of commercial houses have no greater desire than 
to transfer their services to the government. 



With the general disinclination of Frenchmen to 
leave the agreeable life of their French home, 
this premium on official service works as a great 
impediment against securing a reliable and per- 
manent supply of commercial agents. French 
capital has on the whole been backward in enter- 
ing colonial enterprise ; there are few large busi- 
ness houses, and the men who seek their fortune 
in the colonies are usually without sufficient cap- 
ital backing. The fine personal material fur- 
nishe'd to the British possessions in the "younger 
sons" is lacking in the colonies of France. Com- 
mercial development is further impeded by the 
absence of banking and credit facilities, as the few 
large public banks established at present, such as 
the bank of Indo-China, do not give much atten- 
tion to commercial affairs ; and in some colonies 
the existence of a fluctuating currency has proved 
disadvantageous. But the most prominent cause 
of the backwardness of French colonial commerce 
must be sought in the illiberal administrative sys- 
tem and in the regime of excessive protection 
which has been extended to most of the colonies. 
By attempting to establish a monopoly of com- 
merce in favor of the mother country in such 
colonies as Madagascar and |Indo-China, France 
has indeed succeeded in securing for herself the 
bulk of the actual commerce of these depend- 
encies, but she has at the same time seriously 
handicapped their economic development and it 
is almost certain that her absolute share in their 
commerce would actually be larger under a more 



liberal policy. French manufacturers, made sure 
of a market and of high prices, exert no energy to 
develop colonial commerce. They do not adapt 
their manufactures to the needs of local popula- 
tions, nor do they realize the advantages that 
might be gained by making such towns as Saigon 
or Hanoi entrepots for general Oriental trade. 
On account of the high customs duties, all transit 
trade is discouraged, and commerce is confined 
to the local population, who are given few eco- 
nomic opportunities that would enable them to 
become better customers. Matters are not 
helped by the administrative system ; the import- 
ing merchant is .obliged to go through endless 
formalities to get his goods entered, and special 
caution-moneys are exacted at every turn. Mean- 
while officials frequently engage in commerce sub 
rosa, and by the special favors which their posi- 
tion enables them to obtain, they are given the 
opportunity of outdistancing rivals who carry on 
legitimate commerce. 

Indo-China enjoys many natural advantages 
for commercial development. Adjoining the 
Chinese beehive and the kingdom of Siam, and 
looking out upon the prosperous Dutch posses- 
sions and the Philippine Islands, the geographical 
position of this dependency leaves little to be 
desired. The inhabitants are of a comparatively 
high degree of civilization, are apt in the arts, 
and though somewhat less energetic than the 
Chinese, have many of the good qualities of the 
latter. The country is rich in natural wealth, and 



its inhabitants have careful agricultural methods. 
Under these conditions, a rapid economic devel- 
opment might naturally be expected, under a 
proper administration. And, indeed, there has 
been in the last decade a considerable increase of 
foreign commerce; the total for imports and 
exports has risen from 162 million francs in 1893 
to 324 million in 1903; it has therefore exactly 
doubled in ten years. 1 This increase is in large 
part due to the heavy importation of construction 
material for the railways now being built; and 
the last figure attained is, after all, very moderate 
when compared with the commerce of other col- 
onies, being less than the commerce of Natal or 
Ceylon, which latter colony has a population only 
one-sixth as large as Indo-China. The imports 
from France have increased very rapidly in the 
six years between 1897 and 1903, rising from 35.7 
million francs to 94.2 millions ; while the exports 
to France increased in the same period from 
16 million to 19.8 million francs. In 1897 
France furnished 40 per cent, of the Indo-Chinese 
imports and took 14 per cent, of the exports; in 
1903, the percentages had risen to 46 and 16.5 
per cent, respectively. 

The principal staple of export from Indo-China 
is rice, as the colony is practically a country of 
mono-culture ; the largest part of this product is 

a The returns are, however, not thoroughly reliable, as the 
exports from each separate colony are counted in, and produce 
exported from Annam by way of Saigon would be counted 
twice, as export of the former colony and also of Cochin* 



shipped to China, which takes twice as much as 
France. Large quantities of rice have also 
recently been sold to the Philippine Islands. The 
total export of rice in 1901 was valued at 1 10,000,- 
ooo francs. The principal imports of Indo-China 
are cotton textiles in 1902 valued at 32,500,000 
francs as against 16,750,000 francs in 1890 and 
iron manufactures in 1892, 3,762,000 francs and 
in 1901, 25,792,000 francs; other imports are 
metals, thread, coal, tea, wood, and sugar. The 
following table which shows the imports of cot- 
ton goods (in kilogr. tons), is very instructive: 

From Foreign 
From France. Countries. Total. 

1893 1,536 tons 2,704 tons 4,240 tons 

1896 2,059 tons 1,090 tons 3,149 tons 

1898 3,170 tons 551 tons 3,721 tons 

1900 2,614 tons 230 tons 2,844 tons 

1902 2,257 tons 42 tons 2,299 tons 

1903 1,410 tons 33 tons 1,445 tons 

This table shows that while the average impor- 
tation of cotton goods from France has more than 
doubled, that from foreign countries has practi- 
cally been extinguished. The significant fact, 
moreover, is that the total has fallen from 4,240 
to 1,445 tons in ten years, as only the better 
grades are now imported. 

The commerce of Madagascar increased with 
great rapidity after the conquest had been accom- 
plished; yet the figures of the total external 
trade are still very small, when we consider the 
size and the favorable geographical position of 
the island. In the last four or five years the total 
of external trade has fluctuated in the neighbor- 
16 241 


hood of 50 to 55 million francs. This sum is very 
disappointing when we consider that it is only 
slightly over half that of the small island of 
Mauritius, with its 705 square miles and its 
population of 378,000 inhabitants. The extent to 
which France has succeeded in monopolizing the 
commerce of Madagascar is shown by the fact 
that while in 1895 she furnished only 28 per cent, 
of the imports, in 1901 her share had risen to 61 
and in 1903 to 84 per cent. French commerce is 
therefore rapidly approaching the state of a com- 
plete monopoly in Madagascar, with the unfor- 
tunate result that the economic development of 
the colony, aside from works undertaken and car- 
ried out directly by the government, is retarded 
through the absence of an energetic and enter- 
prising body of merchants and industrials. 

In the free trade colonies of French West 
Africa, French commerce naturally does not hold 
the same relative position that it occupies in Mad- 
agascar and in Indo-China. Senegal, where a 
slight differential advantage is given to French 
imports is the one exception, as French commerce 
here constitutes 60 per cent, of the total. The 
percentage in the other colonies is as follows: 
Guinea, 27 per cent.; Ivory Coast, 27 per cent.; 
Dahomey, 26 per cent. The total exports of 
France to West Africa in 1902 were valued at 
35,800,000 francs, or 40 per cent., out of a total of 
90,000,000. British and German commercial 
houses established in the French colonies have 
obtained much of the trade, although they are not 



represented in the official chambers of commerce, 
which wield the political influence. Much dis- 
satisfaction is expressed in France with the fact 
that a larger share of West African commerce has 
not as yet been obtained for France. French 
trade, however, has been steadily increasing, and 
as in these colonies the French merchants have to 
meet the competition of the merchants of other 
countries, this progress may be taken as an indi- 
cation of real strength. When the great public 
works which are now being constructed shall 
have been completed, French trade will be in a 
position to develop a firm hold upon these colo- 
nies without recourse to any system of artificial 

What has already been said of the British West 
African colonies applies with equal force to those 
of France and Germany; and although the posi- 
tion of France seems more favorable than that of 
the other two powers, each would find it difficult 
to enforce a policy of commercial exclusiveness 
in these possessions. Moreover, the general con- 
dition of economic life in these colonies of France 
is certainly prosperous enough and bears testi- 
mony to the stimulating effect of a system of free 
intercourse. In fact, the colonies of French West 
Africa compare very favorably with those of 
Great Britain, being governed with more intelli- 
gence and exhibiting many marks of real prog- 
ress in economic and social life. The French have 
here abandoned the traditional vices of their colo- 
nial policy, and have addressed themselves with 



great wisdom and tact to the solution of local 
problems upon the basis of local conditions 
rather than upon general theories. 

Algeria is entirely under the metropolitan tariff 
system and very few foreign goods are imported, 
France enjoying an almost complete monopoly of 
trade. Algeria takes more goods of the mother 
country than all the other French dependencies 
put together. In 1903, for instance, French 
exports to Algeria amounted to 289 million francs, 
while to all other colonies (including Tunis) 263 
million francs of French goods were exported. 
Algerian external trade has risen rapidly, having 
increased from 65 million francs in 1850 to 550 
million francs in 1890, and standing at the present 
time at about 633 millions. The figures for 1903 
are as follows: Imports, 345,000,000 francs; from 
France, 289,000,000 francs, or 84 per cent.; 
exports, 287,000,000 francs; to France, 237,000,- 
ooo francs, or 83 per cent. It cannot, however, be 
doubted that the development of Algeria under 
a system of fewer restrictions would have been 
even more rapid, considering the exceedingly fa- 
vorable position of that country for entering into 
general commercial relations with European 
countries. Although the restrictions upon Tunis- 
ian commerce are not so severe, French trade, on 
account of the preference given it, enjoys a de- 
cided primacy, as the following figures show 
(for 1903) : Imports, 83,000,000 francs ; from 
France, 46,000,000 francs, or 55 per cent. ; exports, 



71,000,000 francs; to France, 41,800,000 francs, 
or 59 per cent. 

That the merchants in the colonies do not 
always appreciate the French policy of commer- 
cial exclusiveness is shown by the protest made 
on the part of the commercial "syndicate" of 
Djibouti in French Somaliland. This chamber 
of commerce declared that the interests of the 
port, in its commercial relations with Abyssinia, 
were menaced by the imposition of a high tariff, 
before the Abyssinian railway had progressed 
sufficiently to offer adequate facilities and favor- 
able rates of transportation. The syndicate de- 
manded the suspension of the tariff for the follow- 
ing specific reasons: first, the necessity of a 
struggle against cheap transportation via Zeylah 
in British Somaliland ; second, the advisability of 
allowing the commercial current via Djibouti to 
become permanently established, without hin- 
drance through taxation ; third, the fact that the 
budget of the colony would not profit by high 
duties, since taxable goods would pass by way of 
Zeylah instead of going through French territory. 
The considerations here brought out apply equally 
to all French colonies in Africa, with the possible 
exception of Algeria and Tunis. Where the com- 
merce with the interior remains to be built up it 
is of primary importance that the coast towns 
should be free from all artificial restrictions on 
trade and thus be able to offer the greatest attrac- 
tions to commerce from the interior regions. 1 

1 The port of Kwangchau-wan in Southern China, which the 


German Colonial Commerce. The commerce 
of Germany with new countries has developed 
very fast in recent years. Its greatest strength 
is however found, not in the German colonies, but 
in countries like Brazil and Argentina, and in 
some of the dependencies of Great Britain. The 
merchants of Germany pay comparatively little 
attention to political matters ; they seek the most 
profitable markets regardless of nationality, and 
their enterprising methods, as well as* their readi- 
ness to adapt their products to local needs, have 
opened to them great commercial opportunities. 

The commerce of Germany with Africa in 1903 
amounted to 312 million marks; the exports of 
Germany to Africa being 115 millions, the imports 
from Africa, 197 millions. Of this amount Egypt 
and British South Africa furnish the largest single 
items. The trade with the German colonies is 
still insignificant. As these colonies are under a 
free trade regime the German merchants have no 
advantage over any other nationality; neverthe- 
less they have secured the leading share in the 
import trade (in 1902 about 46 per cent.). The 
total of the external commerce of German East 
Africa has practically been stationary since 1897 ; 
the trade with Germany has even decreased since 
1900, the main current of trade, as is natural, set- 
French "leased" in 1898, has thus far enjoyed free trade. 
Governor Doumer has expressed the hope that the "absence 
of customs duties and the entire liberty allowed to ships of 
commerce will tend to make it soon one of the principal entre- 
pots of the Far East." General Gallieni has recently given his 
opinion that the exclusive tariff policy retards the development 
of colonies. 



ting toward Zanzibar. The fiscal deficit met by 
the German Empire is in the case of this colony 
over twice as large as the total amount of German 

The external commerce of Kamerun shows a 
more rapid development; from 9,000,000 marks 
in 1896 it has increased to 16,500,000 marks in 

1903. The commercial houses in Kamerun have 
conducted an energetic campaign against the 
native middle-men, whose methods of trade are 
deceitful and not to the advantage of either the 
Europeans or the negroes of the interior. The 
European merchants have extended their system 
of factories into the hinterland, where negro 
agents are employed, and European commerce is 
thus gradually rendering itself independent of the 
old native trade organization. On the whole, 
German colonial trade does not show an increase 
commensurate to the expenditure incurred by the 
government. This is due partly to the fact that 
the colonies in question are difficult of develop- 
ment, and have no especial advantage of situation. 



Consular Reports. Washington. Monthly Summary of 
the Commerce of the Philippine Islands. Washington. 
Diplomatic and Consular Reports. London. "Commercial 
India in 1902," in Monthly Summary of Commerce and 
Finance of the United States. Dec., 1902. British Parlia- 
mentary Papers. Statistical Abstract relating to India. 
1903. The same, 1902. Vol. 104. Correspondence relat- 
ing to the Sugar Conference at Brussels. East India-Trade, 

1904, (Cd. 1915, 2286). "Views of Government of India on 



Preferential Tariffs." 1904 (Cd. 1931). "Statistical Ab- 
stract for the United Kingdom." 1904 (2192). " Annual 
Statement of the Trade of the United Kingdom with For- 
eign Countries and British Possessions." 1903 (1904, Vol. I, 
2043, Vol. n, 2081). "Board of Trade Report on British 
and Foreign Trade and Industrial Conditions" ("Fiscal 
Blue Book")(ioo3, Cd. 1761X1904, Cd. 2337). " Statistical 
Abstract for the Colonies, 1889-1903" (1904, 1729) "Statis- 
tical Tables for the Colonies, 1902" (1904, 2184). L'An- 
nuaire Colonial. Paris. DOUMER, Situation de 1'Indo- 
Chine. Pp. 63 and 295-342. GALLIENI, Rapport d'ensemble, 
II, 91 ff. Jahresbericht iiber die deutschen Schutzgebiete. 
Berlin. Koloniaal-Verslag, 1902. P. 305. 


ASPE-FLEURIMONT, "L'Angleterre et le Congo." Q. D. C. 
13 J 93- BORNHAUPT, C. VON, Die Kongo Akte und der 
Freihandel. Berlin, 1902. BROWNING, T. B., "Inter-British 
Trade and its Development." British Empire Series, V. 
434. Comite de 1'Afrique Franchise. Bulletin mensual. 
Paris. DOUMER, P., L'Indo-Chine franchise. (Souvenirs). 
Paris, 1905. FRANCKE, B., Der Ausbau des heutigen 
Schutzzoll-systems in Frankreich. Leipzig, 1903. HER- 
MANN, R., Die Handelsbeziehungen Deutschlands zu seinen 
Schutzgebieten. Berlin, 1899. IRELAND, A., Tropical Col- 
onization. Ch. 3. KINGSLEY, MARY H., West African 
Studies. Ch. 12. KOENTG, B. VON, "Handel und Verkehr 
in den deutschen Schutzgebieten." B. z. K. II. LEROY- 
BEAULIEU, PAUL, L'Algerie et la Tunisie. Paris, 1897. Ch. 
7. MASSOUGNES, P. DE, Le regime commercial de TAlgerie. 
Paris, 1901. MOHR, P., "Frankreichs koloniale Zollpolitik." 
Preuss. Jahrbuecher. 106: 100. MOREL, E. D., Affairs in 
West Africa. Parts i and 5. PETIT, M., Les colonies fran- 
qaises. I. 105. ROOT, J. W., The Trade Relations of the 
British Empire. Liverpool, 1903. WAUTERS, A. J., L'fitat 
Independant du Congo. Brussels, 1899. Ch. 27. WHITE, 
A. S., The Development of Africa. ZIMMERMAN, A., 
"Afrika als Welthandelsgebiet" In Weltpolitisches. Ber- 
lin, 1901. 



The limits within which tropical commerce can 
profitably be expanded are confined to the area of 
cheap and rapid communication. The coast re- 
gions, which are tributary to foreign commerce, 
have already become poor in some of the most 
valuable natural products of the tropics and the 
natives do not of their own accord readily adopt 
new methods of raising produce for export. In 
order that commerce in the tropics may increase 
at all commensurately with the expectations of 
the colonizing powers it will be necessary first of 
all to create a more perfect system of communica- 
tions. We have already seen that the movement 
of colonial expansion is due in large part to the 
improved methods of transportation and that the 
very existence of a colonial empire depends upon 
the rapid movement of intelligence, goods and 
persons. It has also been indicated that any 
transformation of the native societies in Africa 
toward greater social efficiency must be based 
upon improved means of communication, which 
will not only render the interior regions more 
accessible to the goods and methods of the West- 
ern nations, but will destroy the cruel and iniqui- 
tous slavery of the carrier system. 



Transportation in India. The development of 
the system of internal communications in India 
is the most indisputable achievement of British 
administration; of the Indian railways, canals, 
and roads, the government is most justly proud, 
and their general excellence is recognized even 
by the most captious among native and foreign 
critics. According to the latest statistics, there 
are in India 170,000 miles of highways, which are 
maintained by the public. The principal high- 
ways are under the administration of the Public 
Works Department, while the local roads are 
cared for by the local committees under the super- 
vision of the district officer. The most cele- 
brated road of India, the Grand Trunk Road, the 
picturesque life on which has been so vividly 
described by Kipling, was begun by the Afghan 
emperors and finished under the administration 
of Lord Bentinck. This road leads from Calcutta 
through the provinces of Bengal and Agra to the 
northwest frontier. Other important roads have 
been constructed over the western Ghats, or 
mountain barriers, in Bombay. The work of 
improving the public roads is still assiduously 
pursued by the government, although compared 
with the railways the main roads have lost in 

When railway building was commenced in 
India, in 1850, economic thought and practice was 
dominated by the laisser-faire school. It was 
therefore deemed advisable to turn over the busi- 
ness of railway construction and operation to pri- 



vate companies. But as it was found impossible 
to enlist private capital in these enterprises with- 
out offering special inducements, the following 
conditions were made the basis of contracts 
between the government and the railway com- 
panies. The government granted the land neces- 
sary for the purposes of the railway and guaran- 
teed five per cent, interest upon the capital in- 
vested. In return, the mail was to be carried free 
of charge, and troops and stores under a special 
tariff. The government also reserved the right 
to control the method of construction and to fix 
the maximum of railway rates. The surplus 
profits were to be divided equally between the 
government and the company. After a term of 
twenty-five, and again after fifty years, the gov- 
ernment was to have the option of purchasing the 
respective railway, which after the lapse of ninety- 
nine years was to revert in any event to the state. 
As the companies did not succeed in making 
any profits, the interest guarantee weighed 
heavily upon the government, and in 1864 the 
system of making guarantee contracts was aban- 
doned. For a short time the mile subsidy system 
was tried but this, too, proved unsatisfactory, and 
in 1870 the government began to construct its 
own lines, using for this purpose the surplus rev- 
enue as well as borrowed funds. It was decided 
to use a more economical system of construction. 
The gauge was reduced to a meter and in some 
cases to even less, notwithstanding the fact that 
the new lines often connected with the broad 



gauge lines (5 feet 6 inches) already built. The 
guarantee companies had of course occupied the 
main routes and left to the government only the 
more subsidiary lines to construct. Neverthe- 
less the government railways secured a consider- 
able amount of traffic and were, on the whole, 

The Famine Commission of 1878 proposed the 
construction of 20,000 miles of railway, in addi- 
tion to the 10,000 then already in existence. 
Most of the authoritative writers of that period, 
as well as the Indian Chambers of Commerce, 
favored government ownership and operation. 
Private railways had become unpopular because, 
being managed at long range from England, 
they had not successfully been adapted to the 
special needs of the country. The interest 
guarantee gave the companies too great a feeling 
of security, so that they did not take any pains to 
extend better facilities to the public or properly 
to improve their systems. The advocates of gov- 
ernment ownership urged, however, at the same 
time that the administration should be decentral- 
ized so as to take the burden from the Indian gov- 
ernment and distribute it among the provincial 
administrations. The latter suggestion was not 
followed out and consequently the government 
was again obliged to take recourse to private 
assistance, as it found the effort of administrat- 
ing a large railway system too heavy. After 
1881, concessions were again granted to private 
companies. At this time the government decided 



in the future to divide railways into three classes : 
first, the military lines rendered necessary by the 
exigencies of frontier defense; second, famine 
relief lines intended to open up the regions sub- 
ject to famines in order to make them more acces- 
sible to food supplies and to general economic 
development; third, commercial lines, which 
would pass through territory wealthy enough to 
render their construction a remunerative under- 
taking. It was decided that the former two 
classes should be constructed by the state, while 
the third might be turned over to private entre- 
preneurs. Companies were also formed at this 
time for the purpose of operating some of the 
state lines. The following arrangement was 
adopted. The state makes an interest guarantee 
of three and a half per cent.; in return it takes 
three-fourths of the net profits after payment of 
the interest. The government owns the lines and 
the contract with the company is terminable after 
twenty-five years, or at terms of ten years there- 
after. The contract with the Indian Midland 
Company is the chief example of this class. 
Wherever railways are constructed by companies 
the technical standards are strictly laid down by 
the government, and all companies operating for 
the government are subject to a rigorous bi- 
annual inspection. Most of the guaranteed rail- 
ways have become the property of the govern- 
ment by purchase. The East Indian Railway 
was purchased in 1871, the Eastern Bengal in 
1884, the Southern Indian Railway in 1891. The 



second of these is now operated by the state and 
the other two by concession companies. 

The rise in the value of the rupee, which makes 
it easier to pay the interest on the foreign railway 
debt and the increased earnings of the railways, 
have finally brought about the satisfactory situa- 
tion that the Indian government actually derives 
a net income from the railways. In 1899 there 
was still a deficit of 4,600,000 rupees. In 1900 the 
state first received a net gain of 872,000 rupees, 
which rose in 1903 to the very acceptable sum of 
13,361,000 rupees. The Indian railways are 
therefore no longer a burden upon the taxpayer. 
They not only pay the guaranteed interest upon 
the capital invested but are beginning to afford 
a handsome surplus to the public treasury. 

On account of the dense population of India 
and the large volume of personal and goods traf- 
fic, the Indian railways are enabled to operate 
with very low tariffs, the lowest, in fact, in any 
colonial dependency. The average rate charged 
per passenger per mile varies from one-third of a 
cent in the third class to slightly aver 2 cents in 
the first class. The carriages though light are 
commodious. Third class carriages are used ex- 
clusively by the natives; they accommodate a 
maximum of sixty persons, which in the hot sea- 
son is reduced to forty-eight. The low rate of 
fare in this class enables the natives to indulge 
their proclivity to travel to a liberal extent. How 
freely they make use of the opportunity is appar- 
ent from the fact that in the year 1903, 184,000,000 



passengers were carried in the third class, with a 
total of 210,000,000 for all classes. The goods 
tariff is as follows : the lowest rate is that on food 
and minerals. It is 2,y 2 pies (five-twelfths cent) 
per ton mile. All other goods are divided into 
five classes, paying from 9 to 32 pies (i^ to 5 and 
one-third cents) per ton mile. 1 The classes of 
goods of which the largest amounts were trans- 
ported in 1902 were coal, food grains, oils, sugar, 
and salt. The total transportation of goods was 
45,500,000 tons. 2 In 1904, 27,140 miles of railway 
were open to traffic, and 3,122 miles were under 

In Indo-China railway building has been the 
particular interest of the administration since the 
loan of 200,000,000 francs was authorized by the 
French government in 1898. Tongking is the 
chief seat of this activity, and three lines branch- 
ing out from Hanoi have been completed for a 
short distance. 8 It is already apparent, however, 
that the cost of the railways planned will be far 
higher than anticipated, and that the loan of 200,- 
000,000 francs will not prove sufficient for the 

*An expert railway commissioner recently reported the 
freight rates as being 80 per cent, too high for the country in 
its present stage of development. 

51 The higher officials of the Indian railways are Europeans, 
but the great mass of employees is composed of Eurasians and 
natives. The figures in 1903 were as follows: 

Europeans 6,022 

Eurasians 8,661 

Natives 387,566 

Total 402,249 

The total length of the railways opened in 1903 was 339 



purposes of the government as at present out- 
lined. The government of Indo-China has per- 
haps been somewhat too optimistic with respect 
to the results to be obtained by railway building 
in a new colony. Indo-China is essentially a 
land of mono-culture ; only a limited demand for 
railway transportation at a long distance from the 
coast exists. It cannot be assumed that the rail- 
way would immediately create the variety and 
strength of industrial life necessary for its sup- 
port. The country is far less densely populated 
than India and far less highly developed in an 
industrial way. It is therefore likely that the 
railways of Indo-China if pushed far into the in- 
terior will for a long time remain a burden upon 
the colonial budget. The inspiring goal of the 
Indo-China railway policy has, however, been not 
so much the development of the interior parts of 
the colony, as the conquest of Chinese trade 
routes in behalf of France. The realization of 
this purpose must remain very doubtful as long 
as an illiberal tariff policy continues to be im- 
posed upon the colony. 

The government of the Philippine Islands has 
from the first emphasized the importance of good 
communications, although thus far little only has 
actually been accomplished. The very first law 
enacted by the Philippine Commission appropri- 
ated $2,000,000 to be used in the construction and 
repair of highways and bridges in the islands. 
The duty of constructing and repairing highways 
has been placed upon the provincial governments 



and the municipalities. Section 10 of the act 
organizing provincial governments (Act 83) pro- 
vides that "the provincial supervisor shall have 
supervision over the construction, repairing, and 
maintenance of the roads, bridges, and ferries of 
the provinces, except those within the inhabited 
portions of the pueblos and barrios thereof." By 
agreement with the president of the municipality 
the supervisor fixes the territory within which the 
municipality is to be held responsible for the 
roads. The provincial board is empowered to 
order the construction and maintenance of roads 
and bridges within the territory under its control. 
Individual provinces have been assisted from 
time to time by grants from the Insular Treasury 
for the purpose of constructing works of com- 
munication, and a government highway has been 
built connecting Manila with the highlands of 
Benguet. It is generally recognized that for 
some time little efficient work can be expected of 
the local units in the matter of road building. In 
order to enable the Commission to carry out 
improvements in communication on a compre- 
hensive plan, it has just been empowered by Con- 
gress (1905) to take up a loan of five million dol- 

Under concession from the Spanish govern- 
ment, the Manila Railway Company constructed, 
and is now operating, a railway connecting 
Manila with Dagupan. In December, 1902, the 
Philippine Commission granted a franchise to the 
same company for the construction of a branch 
17 257 


line into the province of Nueva Ecija (Act No. 
554). This grant is interesting as the first of its 
kind made by the Commission. It provides defi- 
nitely for the general technical details of con- 
struction, such as gauge and structure of the 
embankment; the company is conceded the right 
to have patented to itself such public lands as 
may be necessary for the line, and is granted an 
absolute tax exemption for the period of twenty 
years; the tariffs must be approved by govern- 
mental authority; the concession company is 
required to deposit with the Insular Treasurer 
three hundred dollars for every kilometer of the 
line as a guarantee of the fulfillment of its part 
of the agreement. The Philippine Commission 
has also employed engineering experts to make a 
reconnaissance survey for a system of trunk lines 
in the island of Luzon. The Commission is in 
favor of having these railways constructed by 
private companies, but considers it necessary, in 
order to invite investment, to have the govern- 
ment guarantee an income of 4 per cent, on the 
capital employed; in the report of the Commis- 
sion it was stated that this form of assistance is 
preferred by it to land grants and other forms of 
government subsidy. The United States govern- 
ment accordingly in 1905 authorized the Philip- 
pine Commission to guarantee the interest on 
thirty million dollars of capital stock of companies 
constructing and operating railways in the Philip- 
pine Islands. The rate of interest is not to 
exceed four per cent. ; the guarantee is to be ef- 


fective only in so far as the income of the com- 
panies may be insufficient to meet the interest 
charge; and all sums advanced by the govern- 
ment are to constitute a lien upon the property of 
the railway companies. 1 

Railways in Africa. Algeria has 3,030 kilo- 
meters of railways in operation, all constructed 
by private companies and favored on the part of 
the French government with an interest guaran- 
tee which is in some cases as high as 6 per cent. 
France at present pays 20,000,000 francs annually 
in the form of Algerian railway guarantees, and 
the total sum due the state in 1903, for interest 
advanced up to that time to the railways, was 
600,000,000 francs. Totally aside from the heavy 
cost to the state, the results of the system have by 
no means been satisfactory. The railway com- 
panies have been extravagant in their expenditure 
and have not introduced such reasonable reduc- 
tions in their tariff and such improvements of the 
service as the colony is fairly entitled to. 

The railways of tropical Africa can be under- 
stood only when viewed as a part of the system of 
river transportation. Great expectations were 
originally connected with the African rivers as 
highways of trade, but they have been very 
largely disappointed. Most of the rivers are so 
dependent on the rainfall that in the dry season 

1 The following conditions have been laid down by the Com- 
mission: 1,233 miles of railway are to be constructed; gauge, 
3 feet, 6 inches, in mountain sections, 2 feet; 100 feet right 
of way ; tax exemption, except l /* per cent, of gross earnings ; 
construction to be completed in five years; preference to Fili- 
pjnp labor. More mileage will be authorized later. 



they become utterly unfit for commercial naviga- 
tion. Moreover, as they pass from the interior 
plateau of Africa on their way to the sea, all of 
these rivers have a long series of cataracts which 
interrupt the course of navigation and render the 
current turbulent and unsafe. The necessity for 
transhipment and portage which these falls im- 
pose upon navigation increases the cost of car- 
riage to such an extent as to make it prohibitive 
if long distances are involved. The only rivers 
which constitute commercially satisfactory water- 
ways are the Niger; the Congo between Stanley 
Pool and Stanley Falls, as well as in its upper 
course above the Falls; and the Nile below the 
first cataract and from Lado to Khartum. The 
Zambesi, though a magnificent stream, is inter- 
rupted by a series of great cataracts, and like the 
Senegal is difficult of navigation in the dry sea- 
son. 1 But although the African rivers have thus 
failed to make good the earlier and optimistic 
theory as to their commercial future, they never- 
theless indicate the broad lines of communica- 
tion and constitute the determining factors in 
railway construction. For, with the exception of 
the Uganda railway and the railways of Rho- 
desia, the more important African railways thus 
far have served principally as links in river navi- 
gation, conveying overland the goods and passen- 
gers brought down from the interior on the 
rivers. 2 

1 Above the Victoria Falls there is a navigable stretch of 
over 400 miles. 

a Thus the railway of Senegal connects St. Louis, the end of 


There have been under discussion for tropical 
Africa three great railway schemes, which would 
constitute main trunk lines independent of water- 
ways. These are the Cape to Cairo railway, the 
Trans-Saharian, and the Porto- Alexandre-Ottavi- 
Pretoria line, which is to pass from Angola 
through German Southwest Africa and Bechu- 
analand to the Transvaal. The first enthusiasm 
about these bold conceptions has now evaporated 
and in the light of cool commercial analysis the 
world has come to regard them, with the possible 
exception of the last, only as schemes that have 
had their day in stirring the popular imagination 
and that cannot for the present be regarded as 
practical undertakings. The Ottavi line has 
some chance of realization, because it would 
reduce the distance from London to the Trans- 

the river navigation, with Dakar, the principal French port in 
West Africa. The Sudanese railway connects Kayes at the 
head of the Senegal navigation with Kulikoro on the Niger. 
The commercial route from Timbuctoo to the sea thus lies up 
the Niger to Kulikoro, thence by rail to Kayes, thence down 
the Senegal river to St. Louis, thence by the coast railway to 
Dakar. The entire distance is about 2,350 kilometres, of 
which the railway covers about 830. The railway of Dahomey 
will take for its objective point in the interior some town on 
the middle course of the Niger. In Nigeria the railway which 
has already partly been constructed from Lagos as a starting 
point will be pushed as far as Rabba on the Niger. This rail- 
way will constitute a shorter commercial line of transit to the 
sea than does the all-river route. The Congo Railway con- 
nects Boma with Stanley Pool, flanks the Congo cataracts, and 
carries to the sea all the trade that is brought down the Congo 
and its tributaries to Stanley Pool. The Shire Highlands rail- 
way in British Central Africa forms a link in the Shire river 
navigation, and even the long railway which is planned from 
Stanley Falls to Lake Albert will owe its importance to its 
position as a connecting link between the Congo and the Nile 



vaal by 1,200 miles. Moreover, it would pass 
through a country rich in minerals, so that a good 
deal of way traffic could be counted on. At pres- 
ent the German government opposes the con- 
struction of this line, as it would drain the prod- 
uce of the German colony to a foreign port; but 
should Germany succeed in acquiring Porto Alex- 
andre, the construction of the railway would un- 
doubtedly be undertaken. 

The Trans-Saharian railway, which has enlisted 
so much enthusiasm in France, could not be 
commercially successful, because the very lowest 
freight tariff which could be framed, considering 
the cost of such a railway, would on account of 
the great distance still be prohibitive upon bulky 
goods shipped from the Sudan. As such a rail- 
way would have to pass for about one thousand 
miles through an absolute desert it would en- 
counter the most serious technical difficulties in 
the problem of keeping the tracks from being 
buried in the sand. More fatal even than this is 
the fact that the line would be dependent entirely 
upon transit trade from and to the Sudan, 
which already has far easier and cheaper out- 
lets to the west coast of Africa. 1 It is urged 
that the French state can afford to support this 
railway on account of its military character, as it 

1 How ready its defenders are to clutch at the last straw is 
shown by the suggestion that it would be an excellent plan to 
have a Mohammedan miracle happen somewhere along the 
railway in the desert, in order that a second Mecca might 
arise to attract its quota of the thousands of Mohammedan 
pilgrims who are now spending their good money in being 
transported to Arabia in the ships of other nations. 



would bind together the principal parts of the 
French empire in Africa. As a matter of fact the 
Algerian line to Figig, of which the Trans-Saha- 
rian would be a continuation, itself bears a dis- 
tinctly military character, as may be seen from 
the manner in which it hugs the boundary of 
Morocco. Still it admits of no doubt that the 
military advantages to be gained are not sufficient 
to warrant such a vast and costly undertaking, 
for, after all, the colonies will have to be defended 
primarily upon the sea. 

Though perhaps less chimerical than the favor- 
ite French scheme, the plan to build a railway 
across the continent from north to south does not 
at present invite much confidence. The Rho- 
desian coterie used the cry "from Cape to Cairo" 
with great effect in order to arouse interest and 
to secure funds for their railway plans in South 
Africa; but from the Zambesi to Khartum for a 
distance qf three thousand miles the country is 
not such as to invite railway building on a vast 
scale. Even the Sudanese railway from Wady 
Haifa would hardly have been built had it not 
been for strategetical needs ; and south of Khar- 
tum nearly to Lake Albert, the Nile furnishes suf- 
ficient means of transportation for the present. 
Farther south still, the chain of the Central Afri- 
can lakes and the tributaries of the Congo afford 
ample facilities for local trade. The Cape to 
Cairo railway, therefore, encounters a difficulty 
similar to that of the Trans-Saharian. It would 
be too long for a profitable transit trade, and the 



land through which it passes is either too poor 
or is fairly well provided with waterways, so as 
not to furnish a sufficient amount of way traffic 
for such a large undertaking. The tendency at 
the present time is to abandon such schemes as 
these and to confine railway development to 
shorter lines which work in connection with 
waterways or which tap a region of unquestioned 
natural wealth. But though it is very unlikely 
that there will be in the near future an all-rail 
route from Cairo to the Cape, the Rhodesian rail- 
way will probably be pushed as far north as Lake 
Tanganyika, and the chain of African lakes may 
be connected by shorter railways without encoun- 
tering serious engineering difficulties. An alter- 
native route is to be afforded by using the Belgian 
railroads and waterways in the Congo Free State. 
So that we may look for the establishment of rail 
and water communication between Cairo and 
Cape Town within the next decade. 

The French have been very vigorous railway 
builders in their West African colonies. The 
railways here constructed and projected all bear 
a direct relation to the river routes of the Senega! 
and of the Niger and its tributaries. The first 
railway constructed was the coast line connecting 
St. Louis with Dakar. St. Louis though at the 
mouth of the Senegal river and at the foot of the 
river navigation lacks a good sea harbor and it 
was therefore necessary to connect it with the 
port of Dakar. The railway, aside from provid- 
ing a through route, has also fostered local agri- 



cultural development, especially the cultivation 
of peanuts by the natives, the exportation of 
which has risen from 10,000 tons in 1886 to 150,- 
ooo tons in 1902. 

The French colonial empire in West Africa is 
admirably situated with respect to outlets to the 
sea and each one of the colonies French Guinea, 
Ivory Coast, and Dahomey is constructing a 
railway from its principal seaport to the river sys- 
tem of the interior. The railway in French 
Guinea will connect the port of Konakry with 
Kurussa on the upper Niger, a distance of nearly 
700 kilometers. In the Ivory Coast Colony there 
is being constructed a railway connecting Bassam 
with Kong (about 550 kilometers), the principal 
trading center in the western Sudan. The col- 
ony of Dahomey, a narrow strip of land affording 
an outlet to the sea from the central Sudan, is con- 
structing a railway inland, which it is planned 
will ultimately extend to Karimana on the Niger. 
As Karimana is situated near the point where the 
river enters British Nigeria, this railway is ex- 
pected to divert the trade of the middle Niger 
from the British colony and carry it to the sea 
entirely through French territory. It would 
indeed constitute by far the shortest route from 
the middle Niger to the coast. 

The most remunerative railway enterprise in 
Africa is the line between Matadi and Stanley 
Pool, in the Congo Free State. This railway, 400 
kilometers in length, connects the long reach of 
navigable stream above the Pool with the lower 



course of the river near the sea, circumventing 
the insurmountable obstacles to navigation in the 
adjacent portion of the river. Even without the 
exploitation policy of the Congo State this line 
should have been a paying venture, as all the 
products which are brought down the Congo and 
its tributaries are gathered up and poured through 
it towards the seaports; but the peculiar policy 
of the government has enabled the railway com- 
pany to realize unexampled returns, its net in- 
come having attained the remarkable figure of 
8,000,000 francs for a single year. The Congo 
Free State government has also granted to a com- 
pany in which it is itself interested, the right to 
construct a line connecting Stanley Falls with 
Albert Nyanza and thus forming a link between 
the Congo navigation and the Central African 
Lakes. This railway, remote from the coast and 
unsupported, as it is, by a developed plantation 
industry, can be made to pay only by following 
the same reckless exploitative policy with respect 
to the natural wealth of this region which has 
characterized the activities of the state in other 
parts of its domain. When this railway is com- 
pleted, there will be lacking railway communica- 
tion only between Lakes Victoria and Albert, in 
order to create a complete transcontinental rail 
and river route between Mombasa in Br. East 
Africa and Banana on the Atlantic coast; this 
route will utilize the Uganda railway to the great 
lakes, and the Upper Congo railway to Stanley 
Falls, whence a regular service by river and rail 



is already established to the mouth of the Congo. 1 
The railways of Rhodesia are a part of the gen- 
eral South African railway system and were made 
possible partly on account of the promising char- 
acter of the land, partly through the enthusiasm 
engendered for the Cape to Cairo route, of which 
the railway from Mafeking to Salisbury is to be 
a part. A cross line has been constructed from 
Buluwayo to the Wankie coal mines and to the^ 
Victoria Falls on the Zambesi River; and Salis- 
bury is connected with the sea by means of the 
Beira railway which passes through Portuguese 
East Africa. The purpose of connecting the navi- 
gation of the lower Zambesi and the Shire River 
with Lake Nyassa will be subserved by the Shire 
Highlands railway, connecting Chiromo with 
Fort Johnston on the lake. Various projects are 
under discussion for connecting Lake Nyassa 
directly with the sea either by way of Portuguese 
territory with Port Amelia, or through German 
East Africa with the port of Kilwa. The scheme 
of a German East African railway which was to 
connect Lake Tanganyika with Dar-es-Salaam, 
has been abandoned on account of the absence of 
sufficient natural wealth and agricultural pros- 
pects in the regions beyond the coast belt. 2 A 

*By connecting with the Nile navigation in the north and 
the Rhodesian railways in the south (in Katanga) the Congo 
transportation system will form the central link in a rail and 
river route from Cairo to the Cape. 

a ln 1904 a charter was granted to the East African Railway 
Co., and the German government agreed to guarantee a loan 
of 25 million marks to be issued by the company for construct- 
ing a railway from Dar-es-Salaam inland for about 150 miles. 



short railway has been constructed in German 
East Africa connecting Tanga with Mombo 
(about 1 20 kilometers) ; this line is to be ex- 
tended so as to render accessible the highlands 
about Mt. Kilimanjaro, which are suitable for 
European settlement. 

The most interesting railway in tropical Africa 
is the Uganda railway, connecting Lake Victoria 
with Mombasa, a distance of 583 miles. The eco- 
nomic incentives for the construction of this rail- 
way would scarcely have been strong enough had 
they not been seconded by strategetical needs. 
When the danger to British control of the Upper 
Nile became apparent, the British government 
undertook the construction of this railway, which 
will enable it to bring soldiers from the east coast 
to the lake region and to the Upper Nile in a few 
days, while formerly months would have been 
necessary. The railway from Wady Haifa to 
Khartum is likewise the result of strategetical 
necessity and is only secondarily an economic 
or commercial venture. When, however, the 
Suakim-Berber branch is completed, this railway 
will receive an added importance as a direct 
approach to the Red Sea and as the route for pil- 
grims from the Sudan to Mecca. In the French 
colony of Somaliland a railway is being con- 
structed, starting from D Jibuti, which is to be the 
main channel of Abyssinian commerce, with the 
French colony as the principal emporium. 

Methods of Construction. Formerly it was 
quite generally the practice to have railway con- 



struction in the colonies undertaken by the gov- 
ernment, but in recent years private companies 
have more frequently been relied upon. The rail- 
ways of Uganda and of the Egyptian Sudan were 
built by the state because it would have been dif- 
ficult to induce a private company to undertake 
these expensive works and to execute them rap- 
idly enough in view of the pressing political needs 
of the state. 1 The cost of the railway to Khar- 
tum was borne by the Egyptian treasury, that of 
the Uganda railway by Great Britain. The two 
existing German colonial railways, in South West 
Africa and in East Africa, were built by the gov- 
ernment ; but the railway at present projected in 
Kamerun is to be built by a concession company 
which has received a large public land grant, 
while the new East African railway company 
enjoys an interest guarantee. The railways in 
the British West African colonies are constructed 
by the colonies themselves, with the aid of con- 
tractors. 2 The same plan has been applied in 
Madagascar and in the French Sudan, and was 
formerly used in the colonies of French Guinea 
and the Ivory Coast. State construction, how- 
ever, has not in general proved successful; thus 
the government of Madagascar, which has re- 
ceived so much praise for its progressive methods, 
was able to finish only a small portion of the line 

1 The cost of the Uganda railway was originally estimated 
at 2,240,000, but the actual cost was 5,317,000. 

2 The Rhodesian Company is practically identical with the 
British South Africa Company, as it represents the same 
political and industrial interests; and the railway may there- 
fore be looked upon as a state line. 



from Tananarive to the sea, with the funds 
allowed by the French government, and even the 
portion completed is severely criticised by experts. 
Both French and German colonies, therefore, 
have practically abandoned the policy of state 
construction, and Great Britain, too, in the latest 
colonial undertaking, the Shire railway, has made 
use of a concession company to which has been 
granted a transport monopoly along the Shire 
River for twenty-five years. 

Construction by private companies is the 
method employed in the colonies of Senegal, 
French Guinea, the Ivory Coast, Dahomey in the 
Congo Free State, in Kamerun, and in British 
Central Africa. In the French colony of Da- 
homey and in the Congo Free State the colonial 
government constructs the railway embankment 
for the concession company, which then lays the 
tracks and completes and operates the railway. 
This arrangement with respect to the substruc- 
ture is made because the government alone is able 
to induce the individual chiefs to furnish labor 
in the large masses required. The concession 
companies are either given a guarantee of inter- 
est, as in Senegal and German East Africa, or a 
concession of land as in the Congo Free State and 
Kamerun, or there is a combination of land grant 
and interest guarantee, as in the other French 
West African colonies. In case land grants are 
made it is deemed advisable that the land be given 
out in alternate tracts along the railway line, the 
government retaining control of half the land. 



This system, copied from the railway land grants 
of the United States, allows the colony to share 
in the rise of land values caused by railway devel- 

In order to appreciate the difficulties encoun- 
tered in tropical railway construction, it is neces- 
sary to have some knowledge of the cost and 
technique of construction and of the tariffs 
adopted. The most essential information on 
these points is given in the annexed note. 1 As 
almost the entire economic machinery of Africa 
remains to be built up, the greatest caution is to 
be exercised in the matter of expenditure, and it is 
therefore universally held that the- construction 
of African railways should be made as inexpen- 
sive as possible, consistent with fair service. 
The broader gauges have for this reason been 
abandoned and light material is employed. It 

*The Indian railways vary in gauge from 2' to 5' 6" In 
Africa the narrowest gauge is that of the German South West 
Africa Railway (60 centimetres). Then follows the Congo 
Railway with 75 centimetres. All the French colonial rail- 
ways in tropical Africa and Madagascar have a gauge of one 
metre. The British railways usually have a gauge of 3' 6", 
except that of Sierra Leone, which is 2' 6". It is difficult to 
secure reliable figures as to the cost of construction. Often 
the original estimates alone are recorded and these are of 
course^ always exceeded by a large amount in practice. The 
bierra Leone railway, which cost $21,000 per mile, is said to be 
the cheapest in Africa. The railways in Lagos and the Gold 
Coast doubled the original estimates, the actual cost being 
given as $70,000 and $105,000 respectively per mile. The 
Uganda Railway cost $47,000 per mile. The French rail- 
ways were certainly considerably cheaper, although exact fig- 
ures are not in all cases available. Thus the Guinea Railway 
cost $25,000 a mile. The Algerian railways again were un- 
necessarily expensive. The Congo Railway cost $51,000 per 
mile. The total average cost of Indian railways, including 



has been found that a gauge as narrow as sev- 
enty-five centimeters is sufficient to carry on the 
traffic on one of the greatest trade routes in 
Africa the Congo railway and it is generally 
acknowledged that it would be unwise to exceed 
the width of one meter. Most of the railways 
which have thus far been constructed have gone 
through the difficult territory of the coast regions, 
the rough character of which made the use of a 
narrow gauge specially advisable. On account 
of the tremendous rainfall in tropical countries 
the substructure has to be very solid, in order to 
avoid the need of constant and expensive repairs. 
The suggestion has been made that instead of 
building railways, governments could do more 

equipment, is $40,000 per mile. The freight rates for India 
have already been given. In Africa the rates are necessarily 
much higher. The following table gives the rates in the prin- 
cipal colonies per ton mile : 

Lowest Highest 

Senegal 2.5 cts. 2.5 cts. 

French Sudan 1.4 cts. 40 cts. 

Dahomey 6.5 cts. 50 cts. 

Congo State 8.4 cts. 84 cts. 

German South West 

Africa 5.5 cts. 16.5 cts. 

German East Africa. 18 cts. 21 cts. 

Gold Coast 24 cts. 60 cts. 

Uganda 2 cts. 60 cts. 

Rhodesia 4 cts. 12 cts. 

British India 5-12 cts. 51-3 cts. 

For purposes of comparison it will be interesting to note that 
on the route from the Zambesi to Lake Nyassa the following 
rates prevail (approximately per ton mile) : By boat up river, 
6 cts.; down river, 2j cts.; land-porterage, 60 cts. On the 
route from Dar-es-Salaam to Lake Tanganyika the rate is 
reported as being about $1.00 per ton mile. In Uganda it is 
much higher. In the above table of railway rates the highest 
rate usually applies to such products as ivory and rubber, in 



for the development of colonies by providing 
roads for automobile traffic. This idea led to the 
construction of the highway which passes from 
the east to the west coast of Madagascar by way 
of the capital, Tananarivo. The total cost of the 
undertaking was over 5,000,000 francs, and the 
colonial army was employed in its construction. 
But this Madagascan road is far from being solid 
enough to withstand the tropical rain torrents, 
and it would indeed involve a constant heavy 
expenditure to maintain such a highway in a 
proper state for automobile traffic. Where diffi- 
culties of mountainous territory have to be over- 
come, building a metalled road is generally more 
expensive than would be a narrow gauge railway. 
Splendid roads have, however, been constructed 
in the level coast regions of some of the African 
colonies, and the Selous road in Rhodesia is a 
justly famous achievement. 1 It is, of course, one 
of the first duties of a colonial government to pro- 
vide good roads where the difficulties of the ter- 
ritory are not such as to make road-building and 
maintenance unduly expensive. A model system 
of macadamed roads has been constructed in the 
Malay Federated States, and Java has been pro- 
vided with excellent highways, though in the case 
of the latter colony forced services have been 
extensively made use of for this purpose. 
When we examine the freight tariffs which the 

*The government of the Congo Free State has decided to 
build an automobile road of 1,000 kilometres in the interior of 
the colony. 

18 273 


African railways have established and which are 
in many cases so low that they do not produce a 
net income, the limits within which railway devel- 
opment in Africa can be successfully undertaken 
will become clear. Only such valuable goods as 
rubber, ivory, and the less bulky plantation prod- 
ucts, can support these rates for longer distances. 
Plantations become expensive as their distance 
from the seaports increases ; and the carrying of 
freights, such as lumber, coal, and the base ores, 
to distant points would be an entirely unprofit- 
able undertaking. The railways cannot of their 
own strength create the economic development 
of a colony ; they can simply prepare the way for 
it and assist it. In an old country like India 
extensive lines can be operated at low rates, but 
even in a promising colony such as Algeria, 
development has been much retarded by not 
adapting the railways to the needs of the country 
and by discounting the future too much. 


British Parliamentary Papers. 1902. Vol. 69. Report by 
the Uganda Railway Committee. Administration Report on 
the Railways in India for the year 1901. London. Statisti- 
cal Abstract relating to India from 1891-1901. London. 
Bibliotheque Coloniale Internationale. Les chemins-de-fer 
aux colonies. Bruxelles, 1900. GALLIENI, Rapport d'en- 
semble. Ch. 6. DOUMER, Situation de Tlndo-Chine. P. 
189. Conseil Superieur de Gouvernement de TAlgerie. 
Proces verbal des deliberations. Mustapha, 1899. P. 161. 

D'ANFREVILLE DE LA SALLE, A., Madagascar. Ch. 6-8. 


Annales de Geographic. Nov., 1904. "Les chemins-de-fer 
Africains." Archiv fur Eisenbahnwesen. Many articles. 
ANDREW, Sir W. P., Indian Railways. London, 1884. 
BERNARD, A., "Les chemins-de-fer en Algerie." Q. D. C. 
1899. British Empire Series. General Volume, 242-275. 
COHN, G., Zur Geschichte und Politik des Verkehrswesens. 
Stuttgart, 1900. Part 2. DEPINCE, CH., "Le chemin-de-fer 
de Madagascar." R t P. et P. 37:631. DISLERE, Traite de 
legislation coloniale. P. 476. GALLIENI, "Madagascar. 
Chemins-de-fcr, routes et sentiers." L'Annee coloniale, 
1899. GIBBONS, Major A. ST. H., "The Nile and Zambesi 
as Waterways." Proc. R. Col. Inst. Vol. 32. GUY, C., La 
mise en valeur de notre Domaine Colonial. 453-569. 
HOLDICH, SIR TH. H., India. N. Y., 1905. Ch. 10. LANES- 
SAN, J. L. DE, La colonisation frangaise en Indo-Chine. Ch. 
8. LEFEVRE, R., Les chemins-de-fer de penetration dans la 
Chine meridionale. Paris, 1902. LEROY-BEAULIEU, P., 
L'Algerie et la Tunisie. Part I, Ch. 6. LEROY-BEALIEU, P., 
"Les chemins-de-fer de 1'Algerie." L'Economiste. Jan. 2, 
1904. LOUTER, Staats- en Administratief Recht. Ch. 10. 
MEYER. H., Die Eisenbahnen im tropischen Afrika. Leip- 
zig, 1902. MILLE, P., Au Congo beige. Paris, 1899. Ch. 
4. MOHR, P., "Das Eisenbahnwesen in Algerien." Jahrb. 
fur Gesetsgebung. 1903. RENTZ, E., Les chemins-de-fer 
en Afrique. Paris, 1904. THOMSON, H. C, Rhodesia and 
its Government. Ch. 13. 



Experiment Stations. An important means by 
which a colonial government may assist in the 
development of agricultural enterprises in the 
tropics is the establishment of experiment sta- 
tions and botanical laboratories. The most com- 
plete system of this kind is the famous botanical 
garden of Buitenzorg in Java. This institution 
was founded in 1817 by Reinwardt. Its original 
purpose was the collection of Javanese plants and 
the carrying on of botanical investigations. As 
reorganized in 1868, it became an important cen- 
ter for scientific investigation and for practical 
experiments in tropical agriculture. It is the 
most completely organized scientific institution 
in the tropical world. In its eight divisions, each 
with a competent expert as director, it comprises 
the following institutions: a herbarium and 
museum, a botanical laboratory, an agricultural 
experiment station, a laboratory for agricultural 
chemistry, a laboratory of pharmacognosy, exten- 
sive botanical gardens, a library and photo- 
graphic establishment, and a department of for- 
estry and of tobacco culture. The activities of 
the agricultural experiment station consist of the 



adaptation of native plants to new environments, 
of attempts to acclimatize useful foreign plants, 
and of raising and distributing the seed of plants 
whose cultivation has proved successful. In con- 
nection with the government culture system this 
institution has been instrumental in introducing 
many new plants and forms of cultivation; in 
this manner the cinchona plant was acclimatized 
in Java and made a source of great profit to the 

In British India there exists a large number of 
experiment farms and botanical gardens, the prin- 
cipal of which is located at Seebpur in Bengal. 
The government stations have been especially 
useful in assisting the development of the tea cul- 
ture in India. Tea grows wild in Assam, but it 
was only after long experiments by the stations 
and by the Assam Tea Company that its cultiva- 
tion on a large scale became profitable. Cin- 
chona was also introduced by the government in 
its plantations on the Nilgiri Hills in Southern 
India, and at Darjiling in Bengal. But while the 
Indian stations have thus far been successful in 
assisting in the introduction of new cultures, 
they have achieved less satisfactory results in 
transforming the methods of the native cultiva- 
tors. The managers of the experiment farms are 
often gardeners rather than farmers, who try to 
introduce the methods of the European intensive 
agriculture deep ploughing, subsoil drainage, 
manuring and rotation of crops without such 
modifications as the conditions of India demand. 



The native cultivators, trained in the school of 
experience, do not readily change their methods. 
Moreover, they lack the means to employ the 
expensive processes of scientific agriculture. It 
must, however, be said that even a slight improve- 
ment, though it might not result in an increase 
of more than ten per cent, in the crops, would 
often mean the difference between famine and 
plenty to India. While it is therefore impracti- 
cable to aim at perfectly scientific agriculture in a 
country like India, the methods in use are never- 
theless comparatively inefficient, and could with 
some intelligence easily be made to render a 
larger return. The mistake has often been made 
of locating the Indian farms at the chief station 
of a district regardless of agricultural conditions. 
In districts like Assam and Darjiling, where con- 
ditions are especially diversified, the experiments 
made at any particular station are evidently of 
limited applicability. It is therefore suggested 
that there should be in each district a series of 
similar gardens located in the various zones of 
local agricultural conditions, which might also do 
very valuable scientific work in a careful study of 
the local flora. The Indian experiment stations 
are not supplied with the comprehensive scien- 
tific apparatus, nor do they have the perfect 
organization found at Buitenzorg. Experiments 
made at these stations with great persistence to 
introduce American and other foreign cotton 
plants into India have thus far been unsuccessful. 
The botanical garden at Perideniya, in Ceylon, 


is famous not only on account of the luxuriance 
of tropical vegetation which it exhibits but also 
for the part which it has played in the agricultural 
development of Ceylon. After 1824, the cultiva- 
tion of coffee was introduced in the colony, with 
government assistance. When in 1874 coffee 
became unprofitable on account of the devasta- 
tions of the hemileia, the planters were induced 
to turn their attention to tea. The lean years 
intervening between the abandonment of coffee 
and the beginning of the productiveness of tea 
were bridged over by the cultivation of cinchona, 
which rose rapidly and then fell again in impor- 
tance as the tea industry developed. In all these 
industrial and agricultural manoeuvers the botan- 
ical garden participated, and its experiments were 
of the greatest advantage to the planters. 

In Indo-China a complete mechanism for agri- 
cultural development has been created since 1897. 
Before that year very little had been done. The 
botanical garden at Saigon was merely a pleasure 
park, in which a few amateurish experiments in 
plant acclimatization were carried on. But now 
there has been established a department (direc- 
tion) of agriculture and commerce comprising a 
geological and meteorological service, a bureau 
of agricultural statistics, agricultural and com- 
mercial museums, a forest service, a veterinary 
and epizootic service, local agricultural bureaus 
in the various individual colonies, as well as 
laboratories and experiment stations at Saigon 
and Hanoi. The scientific and practical results 



obtained by the various services are published in 
the Bulletin Economique. The mechanism cre- 
ated is certainly extensive enough; indeed it in- 
vites the criticism of over-elaborateness, and will 
still further increase the disproportionate number 
of officials in the colony. But the government 
hopes to justify it by giving a real impetus to the 
development of agricultural industry. As Indo- 
China is practically a rice mono-culture country, 
the government is attempting to introduce the 
cultivation of other products, such as tea, cotton, 
and rubber. 

Efficient experiment stations exist in the Brit- 
ish West Indies, at Kingston in Jamaica, Castries 
in St. Lucia, Port of Spain in Trinidad, and Dem- 
arara in British Guiana. These stations have 
been specially useful and successful in introducing 
new cultures when the cultivation of cane ceased 
to be profitable, as well as in the discovery of the 
best varieties of cane for the plantations to help 
them withstand the fierce competition of beet 

In Africa experimental farms have been estab- 
lished by Great Britain, Germany, and France. 
Even in the far interior of the Sudan, at Kulikoro, 
an agricultural farm and school has recently 
been opened to which are attached a number of 
subsidiary gardens and farms. This station is 
already sending out large numbers of trees and 
great quantities of seeds. A community of liber- 
ated slaves located near the station is given special 
directions in improved methods of cultivation. 



In Kamerun, at Albrechts-Hoehe, a very efficient 
agricultural station has been created, which en- 
joys the active cooperation of the natives of the 

It has been felt that it would be desirable to 
have a station or institution at which the results 
obtained in the various experimental farms of a 
colonial empire could be sifted and compared. In 
England the Kew gardens and the Imperial Insti- 
tute to some extent fulfil this function, the latter 
with its agricultural laboratories, the former with 
its plant houses, in which the flora of the entire 
empire is represented. In 1899 the French gov- 
ernment created a tropical garden at Vincennes, 
to serve as a connecting link between the various 
colonies, to centralize information, to furnish 
seeds, and to make itself useful in other ways to 
tropical agriculture. The great drawback of 
these institutions, of course, lies in the fact of 
their location in the temperate zone. A central 
station for tropical agriculture should be located 
in the tropics, and although the services rendered 
by these existing institutions are augmented by 
the interest in tropical life which they create in 
the mother country, it is highly desirable that a 
number of scientific institutions like that of Buit- 
enzorg should be created in the colonies. 

Tropical Agriculture. Turning now to trop- 
ical agriculture itself, we shall first try briefly to 
summarize its principal problems. Tropical 
countries are generally inclined to mono-culture. 
Either the natives, without any special incentive 



beyond present needs, give themselves entirely 
to the production of that kind of food which is 
most easily raised on their land, or the planters 
who have some capital at their disposal, find that 
a certain culture far exceeds others in profitable- 
ness for the time being, and therefore concentrate 
their efforts entirely upon one line of production. 
Thus the population of Indo-China, and of 
Burma, as well as the Javanese, originally en- 
gaged almost entirely in the production of rice. 
The West Indian planters, especially in the 
French colonies, staked everything upon sugar; 
and when this industry rapidly declined under 
the competition of the beet sugar of Europe, they 
were reluctant to leave it, although thereby they 
courted great and lasting financial disaster. The 
very first principle of economic development in a 
tropical country should therefore be to insist upon 
a diversification of cultures. This is most easily 
accomplished by bringing under cultivation the 
higher regions, which are hardly ever regularly 
tilled by the natives. Without interfering with 
native tenures or customs, exceedingly rich and 
profitable cultures may thus be introduced, and 
the wealth of a colony increased manifold in a 
short time. The culture of coffee in Java, of tea 
in Ceylon and Assam, and of cacao in Ceylon, are 
carried on in the hill regions. The diversification 
of the agriculture of the natives is a problem of 
greater difficulty, both on account of their reluc- 
tance to change methods that have been followed 
for centuries, and on account of their poverty, 


which forbids experimentation and holds them 
strictly to the raising of food products. In newer 
countries, like Central Africa, where agriculture 
is still in its infancy, it will be easier to give it a 
more diversified character from the start. But 
even in countries like India and Java, much has 
been accomplished in this direction, especially 
with lands which bear more than one crop a year. 
The Dutch Culture System. In the matter of 
diversifying agriculture in the Dutch East Indies, 
the culture system introduced by Van den Bosch 
in 1830 has been very successful. As first intro- 
duced, this system rested upon the right of the 
state as ultimate landlord to share in the produce 
of the soil. It was therefore arranged that the 
natives should devote a portion of their land to 
crops determined by the administration, the har- 
vest to be turned over to the government at a 
fixed price. This system was originally intro- 
duced for the avowed purpose of diversifying 
native industry, and it was decreed that any sur- 
plus gained in excess of the regular land rent 
should be spent for the benefit of the villages, 
while the government itself would assume the 
famine risks. But as the state was in great need 
of money, the system in practice assumed a differ- 
ent form. Large areas of native land were requi- 
sitioned for the cultivation of indigo, tobacco, 
sugar, tea, cinnamon, pepper, and cochineal. 
Moreover, the government established planta- 
tions of its own for these cultures, and increased 
very largely its existing coffee plantations in the 



highlands. Upon all these estates natives were 
forced to work at very low wages ; the prices paid 
native cultivators for produce sold to the govern- 
ment were also far below the market value. 
Through this system a terrible burden was laid 
upon the native population. They were often 
forced to give up their entire lands for the govern- 
ment cultures; they were carried from their 
native villages to distant plantations of the gov- 
ernment, there to work for months for a mere pit- 
tance. But from a financial point of view the 
system was exceedingly profitable to the mother 
country; many hundred millions of guilders 
flowed into the Dutch coffers and helped Holland 
over some severe financial difficulties. 

Notwithstanding this success, opposition to the 
system arose at an early date and became very 
strong after 1848, when the Dutch Parliament 
assumed control over colonial matters. The sys- 
tem was opposed both on the ground that it con- 
stituted a cruel and unjust exploitation of the 
natives, and because it practically excluded indi- 
vidual enterprise from the agricultural industry 
in the Dutch East Indies. The government 
accordingly was obliged to change its economic 
policy and in the organic law of 1854 (Regeer- 
ings-Reglementen, 56) the way for the abandon- 
ment' of the culture system was prepared. In the 
decade following 1860, most of the government 
cultures were given up, and in 1870 the "sugar 
law" provided for the gradual abolishment of the 
government sugar culture within twenty years. 


The only government culture still maintained at 
the present time is that of coffee. For this, 
native lands were not taken, as the government 
plantations are situated in the highlands. But 
the system of requisitioning native labor is still 
kept up, although it has been freed from most of 
its objectionable features. 

While the culture system could not maintain 
itself permanently in the face of an enlightened 
European public opinion and before the on- 
slaughts in behalf of individual enterprise, it nev- 
ertheless served to introduce a diversification of 
agricultural industry in Java. At the present 
time only one-half of the ten million acres under 
cultivation in Java is given up to rice crops ; Java 
has become, next to Cuba, the greatest cane-sugar 
exporting country, and tobacco, indigo, maize, 
peanuts, cotton, coffee, cinchona, and tea, are all 
grown in respectable quantities. The production 
of coffee has passed largely into the hands of indi- 
vidual cultivators; in 1895, the government still 
produced nearly one-half of the coffee crop, while 
to-day its share is only one-fourth. 

Agriculture in India. According to the returns 
for 1902, out of the total area of British India 
(605,000,000 acres) about 307,000,000 acres are 
used productively, of which 200,000,000 acres 
yield crops. As compared with such countries 
as France and Germany the percentage of the 
area used for agriculture and forestry appears too 
small, 1 and it admits of no doubt that vast 

1 In India the percentage of the area which is used produc- 


stretches of jungle in India could be reduced to 
a state of cultivation. 

The statistics show that Lower Burma and 
Assam may be looked upon practically as rice 
mono-culture countries. In the case of Assam 
there exists a rich culture in the highlands that 
of tea but it covers only a small portion of the 
territory. In all the other provinces agriculture 
is more diversified, but the acreage given to crops 
like tea and coffee, tobacco, sugar, and cotton, 
appears relatively exceedingly small. It may 
also be noted that the area planted to wheat con- 
stitutes less than one-tenth of the food producing 
area of India. One of the most remarkable items 
in these statistics is the enormous area given to 
the culture of rice. 1 If we take as a fair average 
the production of eight hundred pounds per acre, 
the lands given to rice would produce about 30 
million tons. 

At the present time an active competition is 
going on between the tea industry of India and 
of Ceylon. The Indian and Ceylonese teas have 
succeeded in driving the leaf of China and Japan 
out of the British market. But their production 
has increased so rapidly that a heavy fall in prices 
has resulted, leading to a serious embarrassment 
of the industry in both dependencies, which has 
further been aggravated by the rise in the value 
of the rupee, and the increase in the tax on tea 

lively is 50.5 per cent.; in France 85 per cent.; in Germany 
91 per cent. 

1 Seventy-three million acres out of a total of 175 million 
given to food crops. 



in Great Britain during and after the Boer war. 
Since 1885 India has planted over 250,000 acres 
with tea and it is apparent that unless further out- 
lets for Indian tea can be found in continental 
Europe, in the United States, Canada, and other 
countries, either by an increase of the demand or 
by a displacement of other oriental teas, further 
expansion of the industry in India and Ceylon 
cannot be looked for at the present time. 

In general it may be said that the Indian gov- 
ernment has not accomplished as much as might 
be expected in a diversification of Indian agricul- 
tural industry and in the improvement of its 
methods. It is of course easier to criticise than 
to mend, but the fact remains that satisfactory 
results have not been obtained in this matter. It 
would certainly seem that with some encourage- 
ment the Indian sugar industry could by this time 
have attained to a far more prosperous condition. 
But as already pointed out, the British merchants 
are more interested in having Indian demands for 
the higher grades of sugar supplied from Mau- 
ritius than they are in the establishment of a 
highly developed Indian sugar industry. With 
the progress of the work of irrigation a diversifi- 
cation of industry becomes of course increasingly 
possible, and it can admit of no doubt that the 
Indian government is honestly attempting to im- 
prove matters in this direction. 

The agricultural industries of the Philippine 
Islands are the production of hemp, sugar, cocoa- 
nut and other oils, and tobacco. The higher 



regions will undoubtedly prove favorable to the 
cultivation of coffee, tea and cacao. Thus far, 
however, practically the only profitable products 
have been hemp and sugar and it must unfortu- 
nately be noted that while some increase is shown 
in the exportation of hemp, which requires little 
labor in its preparation, the sugar industry is suf- 
fering a decline. The native demand for rice is 
filled largely by importation, but with the devel- 
opment of the islands they should become able to 
furnish a large amount of this food material. In 
Hawaii the sugar industry has increased remark- 
ably since the annexation to the United States. 
At present it furnishes 87 per cent, of the agricul- 
tural product and constitutes 77 per cent, of the 
total industrial activity in the islands. Impor- 
tant irrigation works have been constructed, 
increasing the fertility of the lands manifold, and 
an experiment station dealing specially with the 
cultivation of sugar is maintained by the Ameri- 
can Sugar Company. 

African Agriculture. When we turn to less 
developed regions, such as the colonies of tropical 
Africa, the problem before us becomes one of the 
creation of an agricultural export industry, and 
the development of native agriculture toward 
greater strength and productivity. In many 
parts of Central Africa the natives carry on a 
continuous and careful cultivation of the soil; 
especially the Fulbe in the feudal states along the 
upper Niger show pronounced ability as agricul- 
turists and cattle raisers. The principal products 


obtained are sesame, kashew nuts, manioc, cot- 
ton, camwood, henna, indigo and other dyes, the 
kola nut, the peanut, tropical fruits of all kinds, 
hemp and other fibres, millet, maize and rice, 
palm oil, shea butter, rubber, and tobacco. Nat- 
ural products in great variety are therefore 
already utilized, many of which are even now cul- 
tivated for export. With protection from 
marauders, with the systematization of efforts 
and the assistance of scientific experiments, these 
indigenous cultures promise to develop into a vig- 
orous agricultural system. Great agricultural 
activity is also found in the West African coast 
colonies and along the upper courses of the north- 
ern tributaries of the Congo. The natives of the 
southern half of tropical Africa are not quite so 
far advanced in agricultural pursuits; they have 
not come in contact with the civilizing influence 
which Mohammedanism has exerted in Northern 
Africa. But the land itself, especially in Rho- 
desia and British Central Africa, is highly favor- 
able to the development of agriculture. Perhaps 
no country in the world offers a greater diversity 
of opportunities in agriculture than does Rho- 
desia. The white man can live on its elevated 
plains, where he can cultivate not only the crops 
and fruits of a moderate zone, but also many of 
the choicest products of the tropical world. 

Though the development of native agriculture 
in Africa has not gotten beyond a mere begin- 
ning, a few experiments have been made which 
indicate what can be done under favorable cir- 
19 289 


cumstances. Thus the cultivation of cacao, 
which was begun in the Gold Coast Colony in 
1891, had, after a decade, reached a capacity for 
export of five million pounds. The industry is 
carried on entirely by natives, and was fostered 
by the government experiment station, which 
gave out plants and instructions on the methods 
of cultivation. In a similar way the systematic 
cultivation of peanuts in the French colony of 
Senegal was begun after the building of the rail- 
way in the colony. The rapid progress which 
this culture has made indicates that the African 
natives are ready to take advantage of economic 
opportunities. In the West African coast col- 
onies there are large areas exceedingly well 
adapted for the raising of cattle. The natives 
take readily to this pursuit, and it is not extrava- 
gant to expect that West Africa may rival, if not 
excel, Argentina in the export of cattle and meats 
to Europe. 

Cotton. Recently much interest has been 
aroused in the prospective cultivation of cotton 
in African colonies. In 1902 the British Cotton 
Growing Association was founded for the pur- 
pose of extending and promoting the cultivation 
of cotton in the British dependencies so that the 
latter may in time furnish the total supply needed 
in England. It is proposed to found experi- 
mental farms and plantations, to distribute seed 
among the natives, and to arrange for the com- 
mercial handling of the product. The best 
results are expected in West Africa, where cotton 



is an indigenous product, and it is believed that 
West Africa alone can raise enough to supply the 
needs of the Lancashire manufacturers. In re- 
gard to Northern Nigeria, Sir Frederick Lugard 
is quoted as follows: "The samples shown from 
imported seed which I have sent home have been 
extremely well reported on. It is a very ancient 
industry in the country and a very considerable 
quantity of cotton is already being grown for 
native use, and the natives are very keen to get 
the new seed. As to growing cotton for export 
it is entirely a question of cheap transport, which 
in my view means a light surface railway working 
in conjunction with, and not in opposition to, the 
steamer transport on the river." Sir Harry John- 
ston, for many years commissioner in the British 
Central Africa Protectorate, testifies that Central 
Africa "is rapidly coming to the front, not only 
as a cotton-growing country, but as a part of 
Africa which can grow cotton of the very finest 

The colonial governments have declared them- 
selves ready to share the cost of these experi- 
ments, and the railway and steamship lines will 
transport the cotton free of charges for a period 
of two years. Over 5,000 acres are already under 
regular cultivation in cotton in Lagos, ginning 
machines are employed, and the crop produced is 
sold on the Liverpool market at good prices. 
In the Central African Protectorate experiments 
were begun three years ago and already the mar- 
ketable crop has risen to 900 tons. This move- 



ment also extends to the West Indies, whose 
ancient prominence as cotton raising countries, 
it is hoped, may be restored. At the present time 
about 14,000 acres are under experimental culti- 
vation of cotton in these islands. Should these 
various experiments succeed, the Southern states 
of the Union may lose their primacy in cotton 
production and may have to turn to, other lines of 
agricultural industry. 

The German colonies are making similar en- 
deavors to develop cotton cultivation. American 
cotton experts have been employed as teachers 
and experiment directors in Togo; and it has 
already been ascertained that Togo cotton can be 
delivered in German markets at a very handsome 
profit. 1 In German East Africa cotton of an 
excellent quality is raised. The culture is syste- 
matically encouraged by the government and the 
steamer lines have granted free transportation for 
a time. It is of course not intended to extend the 
privilege granted by transportation agencies 
indefinitely. They will simply assist in giving an 
impulse to the industry, which it is believed will 
soon be able to compete with American and 
Egyptian cotton on a basis of perfect equality. A 
company has also been formed in Paris for the 
purpose of fostering the cotton culture in the 
French Sudan. The Sudan is considered especi- 
ally favorable for this purpose because of the 
periodical flooding of the land by the rivers in the 
extended rainy season, and of the fact that the 

1 In 1904, 300 tons were harvested. 


natives already cultivate the cotton plant for their 
own use. 

Irrigation. In tropical dependencies where 
agriculture is highly developed it has most gen- 
erally been found necessary to construct exten- 
sive works of irrigation. Of all these systems 
that of India is the most important and interest- 
ing. The cold, or dry, season which in India ex- 
tends from the beginning of November to the end 
of April, is normally broken by a short period of 
rain towards the end of December; whenever 
these rains fail, the lands which are not provided 
with artificial irrigation cannot mature their win- 
ter crops. As the latter furnish the principal food 
of the natives, a repeated failure of the December 
rains inevitably results in an extended famine 
with all the suffering it brings in its train. The 
problem of irrigation is therefore not simply one 
of surplus production for enhanced profits. 

Systematic irrigation has long been established 
in India, although the most ambitious scientific 
works have been constructed since the British 
occupation. The most primitive form in use is 
well irrigation on the individual farms. The two 
more complex systems are that of the "tank" and 
that of the irrigation canal. "Tank" is the Hindu 
word signifying a reservoir or lake into which the 
waters are gathered in the rainy season. Very 
often natural lakes are used for storage or the 
mouth of a valley is dammed up and an artificial 
reservoir formed. This system is used chiefly in 
Southern India, where the province of Madras 



alone has over sixty thousand irrigation tanks. 
The irrigation canals are divided into perennial 
and inundation canals. The former are furnished 
with permanent head-works and weirs and are so 
constructed as to supply water through all sea- 
sons of the year. These canals have almost all 
been built since the British occupation. The 
inundation canals, on the other hand, are depend- 
ent upon the rise of the water in the rivers. 
They are often merely ditches dug in the soil, 
inexpensive, and not nearly so reliable as the 
perennial canals. The total area of lands irri- 
gated by canals in 1902 was 19,900,000 acres. 1 
The rapid progress in the work is apparent from 
the fact that the area had doubled since 1890. 
Among the most important of the works are the 
Ganges canal with a length of 440 miles and with 
2,703 miles of distributaries, watering an area of 
900,000 acres ; and the Sirhind canal in the Pan- 
jab, which is 542 miles in length, with 4,643 miles 
of distributaries. The total length of the main 
canals in India is 12,800 miles, with distributaries 
measuring 33,800 miles. The highest percentage 
of irrigated land is found in Sind, where it is 86 
per cent, of the total area cultivated. In the 
Paajab it is 36 per cent., in the United Provinces 
32 per cent., and in Madras 26 per cent. Bengal 
is not in need of irrigation, being on the contrary 
often threatened by floods ; there have, therefore, 
been constructed upwards of two thousand miles 

x The total area of lands irrigated by any method is about 
34 million acres or about one-sixth of all lands yielding crops. 


of river embankments. Southern and Central 
India is far less sufficiently provided with irriga- 
tion than is the North. 1 The increase in value of 
agricultural lands in India obtained through irri- 
gation improvements is incalculable ; the govern- 
ment shares in this added wealth through the land 
revenue as well as through the direct returns from 
water rates. 

In 1901 a commission was appointed with the 
purpose of making a systematic study of the 
entire system of irrigation and of proposing a 
plan for future work. This commission in its 
report recommended the expenditure of 30,000,- 
ooo in twenty years on public irrigation works, 
and also the loaning of 400,000 annually to pri- 
vate irrigation enterprises. The funds for this 
vast undertaking are to be raised by loans, the 
interest upon which is to be charged to the famine 
relief fund. The idea of constructing works pro- 
tective against famine is the key-note of the 
report. The agricultural resources of the coun- 
try are to be increased and strengthened so as to 
enable it more successfully to avoid the danger 
of a famine period. 

Some of the Indian irrigation canals are mar- 
velous works of engineering skill. Thus .the 
upper Ganges canal very often carries nearly the 
entire amount of water in the Ganges river, leav- 
ing the river-bed almost dry. At one point the 

x By the end of the fiscal year 1900 to 1901, the total capi- 
tal outlay for canal irrigation works in India was 28,245,- 
ooo. The net revenue produced that year was 1,851,000, 
which amounts to about 6.5 per cent, upon the capital invested. 



canal is carried over the bed of a tributary, for a 
distance of nearly two miles; this is necessary 
because in times of heavy rainfall the tributaries 
from the mountains could not with safety be 
received directly into the irrigation canal on 
account of the destructive power of the masses 
of water which they carry down to the Ganges. 
The great deltaic irrigation works of Madras, 
projected in 1835 by Sir Arthur Cotton and partly 
executed, are also worthy of attention espe- 
cially the bold construction of weirs which turn 
whole rivers aside from their course and render 
their waters useful to millions of people. Thus 
the works of the Kaveri River alone supply over 
a million acres. 

Since the days of Sir Arthur Cotton, who left 
India in 1860, very little has, however, been 
accomplished in the irrigation development of 
South India. The revenue, and the public works 
departments do not always work harmoniously 
together, and the reluctance of the former to 
interfere with vested interests has proved a 
hindrance to improvement in the regions where 
the illiberal zemindari tenure prevails. The chief 
criticism to be made on the Indian irrigation sys- 
tem is that sufficient attention has not been given 
to the storage of water and to more extensive use 
of deep artesian wells. The rainfall which is 
now allowed to be absorbed by the soil and car- 
ried off by subterranean rivers, would perhaps be 
sufficient to supply all the needs of Indian agri- 



cultural lands, if proper storage works were con- 

The Egyptian irrigation system is so impor- 
tant both from the political as well as from the 
economic point of view, that it deserves more 
than passing mention. When we remember the 
fact that the inhabited country of Egypt is noth- 
ing more than two narrow strips of land on either 
side of the Nile river, and that it has from 
times immemorial been entirely dependent upon 
flooding by the Nile, we shall understand the 
importance of the question of regular irrigation 
to the Egyptian people. In Egypt everybody, 
from the ruler down to the poorest peasant, 
watches with great anxiety the returns of the 
Nile gauge. This fact of the dependence of 
Egypt upon the waters of the Nile accounts for 
the political activity of Great Britain in the region 
of the Central African lakes. After the Sudan 
had been abandoned in 1884 it was soon perceived 
that the control of this region by Egypt, or by the 
power that rules in Egypt, was essential to the 
safety of the Egyptian people, because any- other 
power in possession of the Upper Nile and of the 
equatorial lakes would be able to divert and store 
up the Nile waters and deal out flood or famine to 
Egypt at pleasure. Hence the occupation of 
British East Africa, the reconquest of the Sudan, 
the refusal to allow Marchand to gain a foothold 
on the Upper Nile, and the building of the 
Uganda railway, are all a legitimate part of the 
purpose to safeguard the necessary water supply 



of the Egyptian cultivator. Indeed the govern- 
ment treasury itself is directly interested in the 
water supply on account of the immemorial cus- 
tom that lands which in any year do not secure 
irrigation shall not pay the land tax. By widen- 
ing the area of irrigation, therefore, the govern- 
ment directly increases its own resources. With 
practical sense the agents of the British govern- 
ment in Egypt seized upon these essential points 
in Egyptian economic life, and persistently 
pressed for improvements in the established 
methods of irrigation. 

In 1885 a beginning was made and 1,000,000 
was spent in repairing the barrage at the apex of 
the Delta, which, completed in 1861, had since 
then fallen into neglect. This expenditure re- 
sulted in a regular supply of water to the lands 
in the Delta and its beneficent influence upon the 
Egyptian treasury was so great that the govern- 
ment and the powers in control of the treasury 
became favorable to more ambitious plans for 
irrigation works. It was a difficult problem to 
decide how the part of Egypt lying between the 
Delta and Assuan could best be supplied with 
water. It would have been possible to create a 
storage basin in a contiguous depression in the 
desert, or to dam one of the equatorial lakes, 
sending the water supply down the river in time 
to arrive in May or June, when it is most needed. 
The third alternative, actually adopted, was to 
construct a very high and substantial dam at 
Assuan, supplemented by an open barrage at 



Assiut. The work was begun in 1898, and fin- 
ished in 1903, the total cost being about 2,000,- 
ooo. It has been calculated that in consequence 
of this improvement the annual income of Egyp- 
tian agriculture will be increased by 2,600,000, 
of which the share of the government through 
taxation will be 380,000. Moreover, the value 
of the government land directly benefited will be 
increased by more than one million pounds ster- 
ling. During the spring of 1903 the efficiency of 
this ambitious work was first tested. The water 
supply for middle and lower Egypt was well sus- 
tained during the dry season and the summer 
crops in that region are now assured a permanent 
irrigation. The area planted to cotton and to 
rice have been very largely increased in anticipa- 
tion of a reliable and continuous water supply. 

The success of this monumental work makes 
the irrigation service of Egypt of greater impor- 
tance than ever. In its hands lies the destiny of 
every individual cultivator in the realm. It is 
therefore not a matter of surprise that the native 
agents of the service have to be closely watched 
in order to keep them from extortion and injus- 
tice towards individual peasants. It has been 
charged by French critics that Egyptian irriga 
tion has been managed in the interests of the for 
eign cotton industry with little regard to the. 
needs of the native cultivators. As a proof they 
cite an order of the irrigation department of the 
year 1898, according to which the cotton lands 
were first to be supplied with water in the case 



of shortage. While this particular instance can- 
not be disputed, it is nevertheless true that the 
Egyptian government has had in mind the inter- 
ests of the native cultivators as well as the cap- 
italist interested in the rich cultures, and that 
both are to be assured an ample water supply. 

Forestry. The preservation and rational ex- 
ploitation of forests is a matter of great impor- 
tance in tropical colonies. In Java, by a law of 
1874, the forests are divided into djati (teak) and 
wildhout (wildwood) forests. The teak forests 
are all strictly reserved and can be exploited only 
by holders of a concession from the government 
This either entitles the grantee to full control 
over the timber cut, in return for a fixed payment 
to the state, or the entrepreneur may agree to fur- 
nish the wood to the government at a definite 
price per cubic meter. The wildwood forests are 
not so strictly supervised, the main object of the 
government with respect to them being to main- 
tain a sufficient forest area for the agricultural 
needs of the country. It therefore attempts to 
protect them against wanton destruction by fire 
or any other form of spoliation. Government 
plantations of valuable trees, such as gutta percha 
and rubber, have been created at various points 
in Java. 

The forests of India were in 1864 placed under 
the supervision of an Inspector-General of For- 
ests. Under general laws the division into re- 
served and open forests is established. In 1902 
there were 89,424 square miles of the former and 



110,000 square miles of the latter. The reserved 
forests are surveyed and within them nomadic 
cultivation and the wanton burning of trees is 
forbidden, and the cutting of timber for use is 
permitted only to persons who have obtained a 
license. It is intended to reserve sufficient for- 
est land for the needs of the future and to provide 
for a regular reproduction of valuable timber. 
The open forests can be used by the people of the 
respective district, under proper restrictions, for 
obtaining timber, firewood, and grass, free of 
charge. In Burma and Bengal large plantations 
of rubber trees have been established, one of the 
plantations being 10,000 acres in extent. Some 
of the native states, like Kashmir, Mysore, Trav- 
ancore, and Baroda, have also instituted forest 
reserves. Mysore draws an annual income of 
sixty thousand pounds sterling from this source. 
The forestry service of French Indo-China was 
instituted in 1901. There are in this colony 50,- 
000,000 hectares of forest lands, of which 12,000,- 
ooo have been reserved for the domain. 

Outside of timber the most important forest 
product in tropical countries is rubber. As we 
have already seen, experiments in planting large 
areas of land to rubber have been made in Burma 
and Java, as well as in Ceylon. While in some 
instances these experiments have not resulted 
favorably, as the trees died out, in most cases, 
and especially in Ceylon, valuable plantations 
have been secured. They have, however, thus far 
been used not so much for the production of rub- 



her as for obtaining the seed, which finds a very 
ready market in the tropical countries of the 
Orient. The rubber supply of the African for- 
ests was until recently considered almost inex- 
haustible. But the destructive methods em- 
ployed by the natives when gathering rubber, 
and the policy of quick exploitation adopted by 
the Congo Free State, have resulted in a rapid 
decrease of the natural rubber supply of Africa, 
and in its total destruction over vast areas of 
land. It has therefore been found necessary to 
make strict regulations with respect to rubber 
gathering. Thus in the Congo Free State the 
regulations of March, 1900, provide that every 
individual gathering rubber is obliged to set out 
a certain number of rubber trees and vines, and 
the government has announced its purpose of 
restocking the forests quite generally. The rub- 
ber law of New Caledonia, which was promul- 
gated in 1901, contains the following provisions: 
the lessee of domain rubber lands must plant 
annually one-tenth as many trees as he is using; 
tapping must take place during the wet season; 
and for every tree bled to death a fine of from 
fifty to one hundred francs is to be paid to the 
state. The government of British East Africa is 
planning to give special instruction to the natives 
in the best manner of tapping rubber vines and in 
the means of preserving the species from which 
the most valuable product is derived. 

The forestry system of Algeria is an example 
of what colonial forest laws should not be. The 



French forest code of 1827, the product of a reac- 
tionary age, resting upon the principles of feudal 
forest reserves, was extended to Algeria as a part 
of the general system of assimilation. Its unrea- 
sonable presumptions of guilt and its excessive 
fines in matters of forest delicts, such as poaching 
and the taking of fagots, would render it a Dra- 
conian code anywhere; but in a country whose 
natives have from time immemorial considered 
the forests their own, there to hunt and to supply 
themselves with firewood, the application of such 
a system is absolute cruelty. As it was soon 
recognized that the fines prescribed in the code 
were far too high for Algerian conditions, the 
judges were given the power to fix them at their 
discretion within the maximum established by 
the code. This has resulted in making the pun- 
ishment arbitrary. Over 10,000 prosecutions per 
year for forest crimes committed by natives is an 
ordinary average, and no small part of the bitter 
resentment felt by the natives towards the French 
is due to this unreasonable legislation. 1 

Industrial Development. Industrial develop- 
ment as distinguished from agriculture is a sub- 
ject towards which the colonizing nations in the 
tropics have as yet contributed comparatively 
little. It is true, agriculture itself is becoming 

x ln 1901 the registered forest area of Algeria was 2,825,- 
ooo hectares. The larger part of this area, however, consists 
of forests without trees waste land and underbrush where 
the larger trees have been burned down. Forest fires are 
often maliciously set by the natives ; in the twenty-one years 
from 1876 to 1897, and area of over 900,000 hectares (2,200,- 
ooo acres) of forest was destroyed by fire. 


more and more industrialized. Garden plot 
farms where the product is prepared for the mar- 
ket by hand labor are giving way to large semi- 
industrial undertakings with extensive mills for 
the extraction or preparation for the market of 
such products as coffee, sugar, cocoa, and rubber. 
To what extent industrialized agriculture is des- 
tined to supersede cultivation on a small scale is a 
matter for the future to show. It would seem, 
however, that in the tropics the production of 
food grains, such as rice, wheat, millet, and 
manioc, will continue to be carried on by the 
natives on small farms. With a proper arrange- 
ment of labor relations, the natives may also 
engage in some of the so-called rich cultures, fur- 
nishing their products to central factories to be 
prepared for the market. But wherever the large 
plantation industry can succeed in securing work- 
men enough on its own lands it will attempt to 
monopolize the richer cultures more and more. 
The matter reduces itself therefore primarily to a 
question of labor supply. 

The sugar industry in the tropical colonies has 
passed through a period of great depression in 
the last few decades. Through the abolition of 
slavery, the industry had lost a cheap and steady 
supply of labor, so that when the competition of 
beet sugar arose, it was difficult for the planters 
to maintain themselves. Complete ruin was 
threatened when the sugar bounty system of the 
European nations placed colonial sugar under a 
special disadvantage in the open markets. The 



West Indian planters, who are hampered by the 
tariff wall around their natural market, suffered 
most severely ; Mauritius was somewhat relieved 
in this crisis by its nearness to the Indian 
Empire, which imports much sugar from that col- 
ony ; but other Eastern colonial sugar producers 
were also in a critical situation. Hongkong is 
the center of the Oriental sugar industry. Crude 
sugar is sent from Java, the Philippines, the 
Straits Settlements, and Southern China, to the 
refineries of Hongkong, whence the refined prod- 
uct is shipped to the various parts of the Orient 
where better grades of sugar are in demand. The 
competition of European beet sugar has since 
1901 been exceedingly severe in these regions, and 
the cessation of the system of sugar bounties in 
1903 came just in time to prevent lasting injury 
to the cane sugar industry of the far Orient. The 
destruction of the bounty system was essential to 
the survival of sugar plantations in the tropical 
colonies, and although Great Britain will suffer 
by having to pay a higher price for sugar, her 
statesmen felt constrained to make this sacrifice 
for imperial reasons. 

But while the abolition of the bounty system 
has given the sugar industry in the colonies a new 
lease of life, a revival of prosperity can be brought 
about only by thoroughly transforming the indus- 
try in accordance with modern methods of pro- 
duction. Profits were formerly made easily with 
simple and primitive machinery. At present only 
the highest industrial efficiency can successfully 

20 305 


cope with the beet sugar manufacture. Of course 
the tropical planter has in his favor great fertility 
of the soil, but he finds it difficult to procure per- 
fected machinery and an abundant and steady 
labor supply. In order to assist planters in the 
purchase of machinery and to encourage the erec- 
tion of central sugar mills, many colonies have 
adopted a system of making advances for this 
purpose. The British West Indian colonies are 
using imperial as well as colonial loans in this 
way ; Jamaica in 1903 provided for the guarantee 
of the capital and the interest (3^ per cent.) of 
companies erecting central sugar factories; and 
when recently the draft animals of Mauritian 
planters were destroyed by the surra plague, the 
government made advances to the planters to 
enable them to install systems of tramways. The 
central sugar factory system is used in colonies 
where land is held in smaller parcels. In Java 
a system has been worked out under which the 
factory company makes contracts with the na- 
tives of the surrounding country, who bind them- 
selves to furnish annually the cane produce of a 
certain portion of their land. In this manner the 
company is relieved of the risk and trouble of 
procuring a labor supply. The colony of Jamaica 
is also attempting to encourage the lesser culti- 
vators to enter into long time contracts to supply 
cane to central factories. 

Very little progress has been made in the estab- 
lishment of manufactures in tropical colonies; 
nor is manufacturing industry likely to receive 



much encouragement as long as commercialism 
remains one of the cardinal factors in colonial pol- 
itics. Since the colonies were acquired as an out- 
let for the surplus products of the metropolitan 
industries, and since the expense incurred in their 
acquisition was justified on the ground of large 
future gains to commerce, any attempt to build 
up manufacturing industries in the colonies them- 
selves would run counter to the prime motive in 
the colonization movement. We shall therefore 
not be surprised if we find a distinct though some- 
times covert disposition to discourage colonial 
enterprises which would compete with similar 
industries in the mother country. A generous, 
far-seeing policy toward colonial manufactures is 
so rare because it is easy to overlook the simple 
principle that the capacity of a customer to buy 
depends on his wealth. Of this the advance of 
Japan provides a striking illustration ; during the 
last thirty years, while her industrial life was fast 
developing, her imports have increased from 20 
million to 317 million yen, or eightfold, if the fall 
in the value of silver money is taken into account. 
It admits of no doubt that India could be a bet- 
ter customer were she encouraged more fully to 
develop her industrial resources; but certain 
British manufacturing interests are in deadly fear 
of Indian competition. The cotton and jute 
industries are the only manufactures in India in 
which modern methods have been applied on a 
larger scale. In 1903 there were 201 cotton mills, 
with 5,000,000 spindles, employing 177,700 per- 



sons, and representing an invested capital of 
Rxi 7,500,000. The cotton industry of India has 
been created almost entirely by native capital. 
Three-fourths of the mills are located in Bombay 
Presidency, where the Parsees have taken the 
lead in manufacturing enterprises. Although the 
industry enjoys the advantage of very cheap 
labor, the expenses of installation are exceedingly 
high, as the machinery has to be obtained in 
Europe. It is an interesting fact that only few 
members of the weavers' guild seek employment 
in the factories; they look with disfavor upon 
factory industry and leave this work to low caste 
people. The Indian cotton mills have confined 
themselves mostly to the production of coarse 
yarns, and the manufacture of woven fabrics con- 
stitutes only one-sixth of the total production of 
cotton goods. In 1902, there were 36 jute mills 
employing 118,000 persons and Rx7,ooo,ooo of 
capital ; the manufacture of gunny cloth is in fact 
one of the most flourishing enterprises in India. 
All other industries except the manufacture of 
paper, beer, ice, and sugar, are of minimal im- 
portance. The total capital of registered incor- 
porated companies, including banking companies 
in 1902 was 1^x38,259,000. It may be interesting 
to compare these figures with those for European 
Russia, itself not a highly developed country; 
there the total capital invested in financial and 
industrial corporations is about 200,000,000, or 
over seven times as much as the amount recorded 
for India. 



The most deplorable fact in Indian economic 
life is the decline of native industries. In the 
words of a government report, "Indian fabrics 
and products made on a small scale by workers 
at their homes have for years been giving away 
before the cheaper yarns and fabrics, and the iron 
or steel products of British factories." The 
delicate and artistic cotton fabrics of India, such 
as the light gauzes of Santipur and the em- 
broidered muslins of Dacca, are fast disappearing 
from the markets. The quality of goldsmiths' 
work is declining, as is the marvelous brass and 
bronze industry, under the onslaught of cheap 
machine production. Members of the guilds and 
trades can no longer use their inherited training 
with profit and are forced to turn to agriculture, 
which already employs over 70 per cent, of the 
people. One of the chief reasons of this decline 
of native art and industry is the absence of wealth 
among the natives; the native courts have 
become impoverished and no prince would now 
even distantly approach the fabulous luxury of 
paying $5,000,000 for a jeweled shawl, as is 
recorded of a former ruler of Baroda. The Euro- 
pean residents and travelers in India may have 
the means but they lack the taste to support the 
most artistic industries, the delicate and carefully 
wrought products of which cost so much more 
than cheap imitations. Inferior goods supplied 
by European industry are replacing the native 
products because a workman cannot afford to 
spend a month in producing an article of which a 



machine will turn out a fair though essentially 
crude imitation in half an hour. Native industry 
in its more modest forms still remains entrenched 
in the villages. Every village has its blacksmith, 
its weaver, and its potter, who in return for sup- 
plying the needs of the villagers are supported by 
them. They are not paid by piece work, but are 
given a yearly allowance of grain and allotments 
of land. Are these rude artisans to be the only 
heirs of the glorious traditions of Indian art? 

In Indo-China the coming of the Europeans 
has also resulted in a serious discouragement of 
the native manufacture of iron, copper, and cot- 
ton, and on its artistic side native industry has 
certainly suffered very much. In the famous 
report of 1902, Governor Doumer has outlined in 
its entirety the ambitious economic policy of 
France in Indo-China, but all he has to say about 
native industries is the following: "If the profit 
of the colony from the establishment of industries 
on its soil cannot be doubted, still we must also 
consider the interests of the metropolitan produc- 
ers. The latter demand that we shall not create 
in countries acquired by France, often at great 
expense, an unsupportable and disastrous compe- 
tition. It is a fact that industrial competition 
is not the role of colonies nor the object in view 
when they were acquired. Therefore, if we are 
to encourage industries it must be within limits 
in which they cannot injure the industries of 
France. In other terms colonial industry must 
do what French industry cannot do, and send its 



produce to regions where metropolitan products 
cannot go." The governor concludes that the 
establishment of cotton yarn factories might be 
encouraged as not injurious to French industry. 
It is perfectly clear that the French government 
intends to apply strictly the ideas of the old pacte 
colonial, and will not allow any competition with 
metropolitan industry to arise in its colonies. 

In tropical Africa, industries on a larger scale 
are totally absent and among the natives but little 
industrial life has developed. The forging of 
iron and copper, however, is practised by many of 
the tribes, and textile manufacture has reached a 
considerable state of perfection in the regions 
along the Upper Niger, so that it has even been 
suggested that this might be made a center for a 
native cotton industry to supply the needs of trop- 
ical Africa. But it is hardly to be expected that 
these domestic industries of Africa will be able 
to do more than barely hold their own before the 
importation of European goods. West Africa is 
looked upon as a specially favorable market for 
the latter and attempts to organize the native 
industries on a larger scale will encounter many 
obstacles. From all this it will be apparent that 
for a long time to come the agricultural and 
extractive industries will remain by far the pre- 
dominant element in tropical economic life, and 
that no matter how desirable from the point of 
view of native life the development and strength- 
ening of the manufacturing industries may be, 
their progress will be slow and painful except in 



native societies which may prove strong enough 
to take their economic and political destinies into 
their own hands. 



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Annual Irrigation Revenue Reports of various Indian 
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port d'ensemble. P. 244. BOUCHANT, "Rapport sur le com- 
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D'ANFREVILLE DE LA SALLE, A., Madagascar. Ch. 10 and 
ii. ARNTZENIUS, G., The Industrial Arts of India. Lon- 
don, 1880. BERNIER, H., "L'Evolution industrielle de 
Tlnde." Ann. d. Sc. Pol. Vols. 10 and n. BRUNHES, J., 
L'Irrigation dans la peninsule Iberique et dans 1'Afrique du 
nord. Paris, 1902. BROWN, W. H., On the South African 
Frontier. New York, 1899. Ch. 22. BUCKLEY, R. B., 
Irrigation Works in India and Egypt. London, 1893. 
BURCK, W., De Governements-Koffiecultuur. Batavia, 1897. 
CHATTERTON, A., Agricultural and Industrial Problems in 
India. Madras, 1903. Comite de FAfrique Fran^aise. 
Bulletin mensual. Paris. CONRADT, L., "Die landwirt- 
schaftliche Regierungsstation Johann-Albrechtshoehe." B. 
*. K. I. DIANOUS, P. DE, Notes de legislation tunisienne. 
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GUY, C, La mise en valeur de not re Domain Colonial. 157- 
354. HENRY, T., Le coton dans 1'Afrique occid. franc.. 
Paris, 1904. HUNTER, Sir W. W., The Indian Empire. 
Ch. 17. JANSSEN, C. W., Die hollaendische Kolonialwirt- 
schaft in den Battalaendern. Strassburg, 1886.- JOHNSTON, 
Cu, Irrigation in Egypt. Washington, 1904. KOENIG, B., 
VON, "Handel und Verkehr in den deutschen Schutzge- 
bieten." B. z. K. II. LANESSAN, J. L. DE, La colonisation 
fransaise en Indo-Chine. Ch. 6-7. LEROY-BEAULIEU, P., 
L'Algerie et la Tunisie. 113-137. LITH, P. A. VAN DER, 
Encyclopaedic van Nederl.-Indie. Hague. Articles: "Kof- 
fiecultuur," "Boschwezen," "Cultuurstelsel." LOUTER, J. DE, 
Staats- en Administratief Recht. 99-106. MAINDRON, M., 
L'Art Indien. MARCASSIN, L., L' Agriculture dans le 
Sahara de Constantine. Paris, 1895. METIN, A., L'Inde 
d'aujourd'hui. Ch. 9. PRATT, E. A., The Organization of 
Agriculture. London, 1904. RUTTER, F. R., The Inter- 
national Sugar Situation. Washington, 1904. STRACHEY, 
Sir J., India. Ch. 18. WESSELS, L., De Oppheffing van het 
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The Indian Forester* Allahabad, India. 


An individualistic civilization calls for a high 
mobilization of property rights in land, for clearly 
defined principles of ownership, and for perfect 
power of disposition. Yet even with the Western 
nations the assimilation of land to movable prop- 
erty is a recent development. In mediaeval law, 
land was neither freely alienable by the person 
occupying it, nor could it be taken on execution 
for his debts. Among none of the peoples with 
whom we have to deal in colonial administration 
had landed property passed beyond this stage 
when they came into contact with Europeans. 
Property ideas were not at all developed with 
logical precision, but ordinarily a rather complex 
system of occupation rights had grown up, with 
no clear theory as to the exact location of the 
right of ultimate disposal. Generally the king or 
chief claimed the ultimate property in the soil. 
From the code of Brihaspati, in which the king is 
spoken of as the "owner of all," to the laws of the 
Madagascan ruler, Adrianimpoinimerina, who 
declares, "the land belongs to me, and I divide it 
up as pleases myself," the rulers have made more 
or less sweeping claims of ultimate or direct 



ownership to the soil of their realms. By the side 
of such claims of eminent domain, a system of 
occupation rights was gradually developed. But 
property was never looked upon as fully apper- 
taining to an individual and subject to his abso- 
lute disposition. It was rather the tribe or clan 
or some other enlarged form of the family to 
whom the ownership belonged, and their rights 
could by no means be ignored by the individual 
occupant for the time being. The latter there- 
fore could neither alienate nor mortgage his land. 
He had an indefeasible right of occupation, but 
he could not turn his right into individual prop- 
erty to be disposed of at will. Although there 
are innumerable variations of law and custom in 
the native systems, they none of them look upon 
the soil as a subject of direct ownership, purchase, 
and sale. The giving up of ancestral soil was 
often even considered sacrilegious. For these 
reasons land did not possess a fixed market value ; 
it was looked upon rather as a commodity fur- 
nished by nature, which could be occupied and 
used but which was essentially different from the 
goods in which men traded. 

When the Western nations began to come in 
touch with the more primitive peoples, they did 
not put themselves to any trouble to understand 
the native views of property and occupancy. It 
has generally been their policy to treat the occu- 
pant as owner, to give him a complete and un- 
clouded title to the land in his possession,, and to 
render the latter subject to contract and incum- 



brance. This policy, which few of the European 
nations have avoided, gives rise to great difficul- 
ties. In the first place, it is often next to impos- 
sible to ascertain the accurate contents of the 
individual claims, especially in colonies where 
the tribal organization still retains its vigor. In 
the second place, if such a system is really car- 
ried through, the agriculturist, who is now looked 
upon as the absolute master of his holding, gen- 
erally becomes the victim of men shrewder than 
himself, who entangle him in legal obligations, 
which sooner or later result in the loss of his land. 
The welfare of native societies is thus often seri- 
ously impaired by a system which at first sight 
appears eminently just and progressive. It there- 
fore remains a very important question how far 
native systems of tribal and communal holding 
are to be superseded, and how rapidly the West- 
ern individualistic conceptions of property in land 
should take their place. 

Algerian Land Laws. The attempt to indi- 
vidualize native landed property has appeared in 
its most radical form and with its most disastrous 
results in Algeria. The law of 1863 planned the 
gradual transition from tribal property to the 
property of the French civil law. It provided 
that the property of the Algerian tribes should be 
divided among the douars, or clans. In these 
the property should still be inalienable, but the 
indefinite tribal holdings would thus be reduced 
to definiteness, and a transition to private prop- 
erty made possible. This law was based on a 



rational principle, for though it aimed at the ulti- 
mate establishment of private property in land, 
it recognized that this condition could be 
approached only very gradually. As is said in 
the Expose des motifs of the law, "Community of 
property is part of the customs of the natives. 
We do not pretend to be able to change these 
customs by our will alone. It will be necessary 
to wait until time and example shall have made 
the natives comprehend and solicit the benefits 
of another system." 

But this rational law was by no means satis- 
factory to the French colonists in Algeria. The 
lands at the disposal of the government for pur- 
poses of concession were beginning to give out, 
and it therefore appeared highly desirable to 
accelerate the process of individualization of the 
natives' property, in order that part of this, too, 
might be acquired by the French settlers. The 
result of this agitation was the law of 1873, which 
provided that the government, upon its own 
initiative or upon request of the parties interested, 
should divide into individual holdings the various 
kinds of native property, and accord to each indi- 
vidual owner the complete power of disposal over 
his share. The native property of Algeria is of 
two kinds, the arch or tribal property, and the 
melk or particular holding. The latter, however, 
is not individual property in the Western sense. 
It originated generally in grants made by the 
Sultan to prominent citizens for services, as a 
matter of favor. But from the original grantees 


it descended to their families, and as it was never 
subdivided, there was soon little practical differ- 
ence between the melk and the arch. For in the 
case of either, a large number of claims would be 
involved in the settlement of any particular piece 
of property. This condition of property rights 
made the execution of the law of 1873 exceedingly 
difficult and mischievous in its results. As many 
as four hundred claimants at times had to have 
their rights to a single tract of land adjusted. 
The individual parcels thus allotted were often so 
small as to have no real value at all. When it 
was considered inadvisable to divide the body of 
an estate among the various claimants, it was put 
up at auction, with the result that all of the occu- 
pants of the land were ousted from it, and re- 
ceived a payment in money which did not consti- 
tute in any way an equivalent. Usurers were 
quick to take advantage of the natives under this 
law. By taking one member of a tribe under 
their control, they could force him to ask for a 
division; if the estate was adjudged to be indi- 
visible they bought it in at auction. Large num- 
bers of natives were thus turned into proletarians 
filled with bitter resentment against a govern- 
ment which had caused their expropriation. In 
1887 an amendment was passed by which the 
achievement of the purpose of the law was to be 
accelerated. But in 1890, criticism began to be 
heard. Fourteen million francs had been spent 
at that time in the endeavor to subdivide the 
native property, and it was calculated that 60 mil- 


lions more would be needed before the work 
could be completed. Except as the usurers and 
some of the colonists had benefited, no permanent 
results had come from this expense; because 
usually the natives, after a division of their prop- 
erty had been made, completely ignored the new 
arrangement of their rights, and continued to live 
in tribal communities upon their ancestral hold- 
ings, unless indeed the land had been entirely 
taken away from them. The criticism soon 
became strong enough to produce a change in the 
law. In 1897 it was enacted that a division could 
only be undertaken if demanded by one of the 
co-partners ; the government was not to proceed 
proprio motn. It was further enacted that auction 
sales of entire estates should no longer be ordered, 
but that the estate should be divided according to 
family stems, and only the share of that particular 
family was to be liable to sale whose debt had 
caused the demand for division. Even under this 
law, however, the protection of the natives is not 
complete, as creditors may still use their influence 
to urge individuals into demanding a division, 
and may then purchase the allotted shares from 
such owners as find themselves in an embarrassed 

On account of the mixture of French and native 
law, the Algerian land system is in a state of great 
confusion. By the law of 1897 it was somewhat 
simplified, assurance of title was introduced, and 
the natives were given the opportunity to register 
their titles at a small expense. This adoption of 



a modified form of the Torrens system would 
seem to promise an escape from the confusion 
and injustice of the land regime heretofore exist- 
ent in Algeria. The Algerian land policy shows 
how dangerous it is to trust the interests of the 
natives to the political representatives of Euro- 
pean colonists. The total disregard of native 
institutions; the desire to accelerate the dispos- 
session of the natives from their inherited lands ; 
the harshness with which the processes of law 
were enforced against them and execution was 
levied upon their holdings, show that the inter- 
ests of the natives are in need of constant and 
watchful protection on the part of the administra- 

In Tunis thus far there has been no invasion of 
native rights and customary institutions. The 
landed property of Tunis is divided among the 
state domain (beylik), the religious foundations 
(habous), and the Mussulman private property 
(melk). The tribal form of property is not found 
in Tunis. In order to obtain lands for the French 
settlers, an arrangement was made with the 
Tunisian authorities that public habous, which 
constitute one-third of the area of Tunisian 
lands, could be alienated to colonists upon per- 
manent lease (enzel) in return for an annual 
rental of from two to ten francs per hectare. The 
French colonists are not, however, satisfied with 
this arrangement; they demand the right to re- 
deem the rental at sixteen times its annual value 
and thus to make themselves complete owners of 



the property. If such a conversion were under- 
taken, thirty times the annual value would be a 
juster figure, as the charities and other founda- 
tions to whom the habous belong, would have 
difficulty in investing the funds to equal advan- 
tage, while the lands are always of value to them. 
Though the native system of land tenure has not 
been directly interfered with in Tunis, the door 
to a gradual transformation and settlement of 
property rights has been opened by the introduc- 
tion of the Torrens system of land registration. 
This system not only makes titles certain and 
conveyances easy, but it furnishes a simple 
method by which the natives may gradually 
assimilate their land-holding to that under the 
European law. Any native claimant who desires 
to fortify his tenure may, after the satisfaction of 
all intervening claims, secure a title of individual 
property, with complete power of disposition; 
but no attempt has been made to force the natives 
to have their title thus made definite and certain. 
The great advantage of the Torrens system, 
when applied to tropical colonization, is that it 
renders possible the gradual supersedure of native 
forms of landholding by a system based upon 
fully recognized, definite, and absolute private 
ownership, certified authoritatively in a clear and 
simple title deed. As it is optional it does not 
officiously interfere with the settled customs of 
the native population. Where the system is used 
it is generally required that all concessions, 
grants, and conveyances to non-natives shall be 
21 321 


thus registered. As the advantages of having a 
clearly defined title are gradually perceived, the 
natives of their own accord desire the use of the 

Throughout the French colonies the purchase 
of land held by natives is encouraged, and the 
treaties of protectorate usually contain the pro- 
vision that Europeans shall be permitted to ac- 
quire real property. Certain restrictions on the 
power of the natives to alienate their lands are, 
however, imposed, both in order to safeguard the 
European purchaser against imposition by per- 
sons who have no right to the land in question, 
and to protect the natives against their own im- 
providence. In Tongking a decree of .1886 pro- 
vides that the native vendor must deposit his title 
deeds with the resident for verification before 
making a sale. In French Congo, land sales by 
the natives must be approved by the administra- 
tion. The Torrens system of registration has 
been introduced in Madagascar and French West 
Africa. In Madagascar the obligation of having 
their title registered is imposed upon all who pur- 
chase or receive a grant of domanial lands, and 
upon all Europeans who purchase land from the 
natives. As landed property in Madagascar had 
even before the French conquest approached an 
individualistic basis, the transition to a pure sys- 
tem of private property will perhaps be found 
easier there than in most other colonies. 

The Indian Land System. The government of 
British India has dealt with the native land sys- 

322 . 


tern strictly upon the basis of individual property 
without regard to historical antecedents. The 
Permanent Settlement of 1793 in Bengal, by 
which the rights of the government to the land 
revenue were defined, constitutes a decidedly 
aristocratic policy. The zemindars, who were 
tax gatherers of the Mogul's government or local 
noblemen, were in this settlement treated as the 
owners of the territory from which they had there- 
tofore merely collected the revenue. Peasant 
rights were not at all protected, and consequently 
in the half century that followed, the Bengal peas- 
ants were subjected to a terrible regime of rack- 
renting and general oppression. After the 
Mutiny their position was at last improved by the 
Land Law of 1859. This law divided the peasant 
tenants into four classes according to the duration 
of their holding. The first class comprised those 
who had held land for themselves and through 
their ancestors at the same rental since 1793. In 
the case of these no increase in the rental was to 
be permitted. The second class was composed 
of those tenants who had paid the same rate for 
twenty years ; these were presumed to have held 
since 1793. In the case of tenants of the third 
class, who had held their lands for from twelve 
to twenty years, rents could be raised only 
through an auction at law and for certain speci- 
fied causes. The rights of the fourth class, ten- 
ants merely by occupancy, were not protected by 
this legislation. A subsequent law, however, 
extended the protection to all tenants who had 



held for three years or more. The creation of a 
feudal and aristocratic system of land-holding by 
Great Britain in Bengal has been justly criticised. 
The system was, however, established almosf 
entirely for reasons of administrative conveni- 
ence, as it secured a comparatively small and 
responsible class of taxpayers. 

In the province of Oudh, there existed, at the 
beginning of British rule,, a local nobility, the 
talukdars. After the Mutiny the rights of this 
class over the land were acknowledged and forti- 
fied by the Indian government, while, as in Ben- 
gal, the rights of the cultivators were left without 
due protection. In terms, the latter rights were 
"reserved," but as they had to be proved by the 
claimant, while the legal presumption of owner- 
ship was entirely in favor of the talukdars, this 
reservation had no practical effect in safeguarding 
the occupancy tenure. The situation was some- 
what improved by the law of 1886, which provides 
that the rental paid by the tenants can be en- 
hanced only every seven years and then not by 
more than 6 l / 2 per cent. A tenant who regularly 
pays his rent cannot be ousted and therefore 
acquires a legal occupancy right. 

In the provinces of Madras and Bombay, 
ryotwari tenure is the prevailing system. The 
cultivator or tenant is treated as the owner of the 
land he occupies, and pays his land tax directly 
to the government. At first sight it would seem 
that the economic position of a tenant would be 
improved by this recognition of full ownership, 



as he can now share in the natural increment of 
value and is given the power to borrow money 
on the credit of his land. But to the Indian peas- 
ant, always living from hand to mouth, the sud- 
den ability to get a comparatively large sum of 
money for his mere promise to pay and in return 
for signing a piece of paper, was too easy a road to 
enjoyment. The peasant gave feasts to his 
friends, hired elephants and camels for proces- 
sions through the village, and lived in noble state 
until the day of payment came. Others, though 
less improvident, were forced to mortgage their 
lands through failure of crops or in order to be 
able to pay the land tax, which falls due in an 
equal amount in good and bad years. The rapid 
growth of indebtedness of the Indian peasantry 
has startled everyone, and it is now universally 
admitted that the agricultural masses of India will 
not be able unaided to protect themselves against 
complete expropriation. m The rate of interest 
which they are forced to pay is most excessive; 
24 per cent, is the average amount, but it often 
rises to double that figure at times of stress. 
Among the many suggestions for relief which 
have been made, those which deal with better 
credit facilities have already been mentioned. 
Others involve the limitation of the power of the 
peasant to alienate and mortgage his land and the 
protection of the indebted landholder against 
expropriation. The great agricultural distress 
in Bombay led to the passage of the so-called 
"Deccan Relief Acts" of 1879 an d 1881. These 



acts provide that no land is to be sold for debt 
unless it has been specifically mortgaged, and that 
in the latter case the court may order the land to 
be cultivated for the benefit of the mortgagee for 
seven years, reserving the support of the debtor ; 
at the end of this period the debt is to be canceled. 
While these acts have somewhat relieved the dis- 
tress, the transfer of land to creditors has not 
been stopped, for the latter still finds means to 
get the peasants completely under their control. 
In the provinces of Agra and the Panjab, the 
land revenue is based on the village community 
system. Notwithstanding the presence of the 
village organization, private property rights are 
recognized and a danger similar to that already 
noticed in Madras and Bombay threatens the cul- 
tivators. Through the labors of an experienced 
and statesmanlike civil servant, a solution of the 
difficulty has been attempted in the "Panjab 
Alienation of Land Act" of 1900. This act for- 
bids all sale of agricultural lands by a peasant 
except to an agriculturist of the same village or 
tribe. Leases or mortgages are limited to a 
period of twenty years, except a mortgage under 
which the mortgagor continues to occupy the 
land at a rent not more than double the land rev- 
enue. The effect of this act will be eagerly 
watched. It restricts the liberty of the peasant 
to deal with his property, but as this liberty has 
in experience often proved to be the liberty to die 
of famine, it cannot be questioned that such cur- 
tailment is called for in the interest of the peas- 



ants themselves. As sale on foreclosure is for- 
bidden by this act, one of the effects of the 
English law which has aroused the most bitter 
resentment among the natives is annulled; 
namely, the expulsion of a man from the holding 
of his ancestors through a strict enforcement of 
usurious contracts obtained from him through the 
sharp practices of village money-lenders. In 
Bombay, an act was passed in 1901 which pro- 
vides that land forfeited to the state for non-pay- 
ment of the tax may be granted out for short 
terms is non-transferable tenure. This act is 
another indication that the Indian government is 
beginning to doubt the wisdom of a completely 
individualized system of peasant property. 

West African Land Law. In West Africa a 
peculiar notion of property prevails among the 
natives. As far as any idea of landed property 
may be said to exist, it is associated either with 
the family or with the chieftainship (called in the 
native language, "stool"). The person in occu- 
pancy of land is therefore not looked upon as the 
owner; he holds it in trust for the family or the 
"stool" and he has no power to sell it. If he 
grants occupancy rights to others, no length of 
prescription will create the right of property in 
their favor, nor will lands pledged for indebted- 
ness ever accrue to the creditor. A system of 
individualized property wojuld do violence to the 
fundamental notions of West African law. The 
alienation of lands by the natives has, accord- 
ingly, been surrounded with many conditions and 



safeguards, in the European dependencies. In 
the protectorate of Lagos, chieftains may alienate 
land only with the consent of the governor, who 
will withhold permission if the land is to be used 
for purposes of monopoly or speculation. In the 
Gold Coast Colony, concessions by natives must 
be filed with the registrar for the court of the 
province, and notice must be given to the gov- 
ernor; there must have been adequate valuable 
consideration and the customary rights of all 
natives concerned must have been safeguarded. 

In the Pacific Islands the interests of the 
natives in their land are strictly protected. The 
regulations issued by the High Commissioner for 
the Western Pacific provide that natives cannot 
sell land without the consent of the commissioner 
and then only for use in agriculture and for build- 
ing lots ; land which is not used by the purchaser 
in accordance with his agreement is forfeited to 
the original owner. Leases for more than a year 
also require the sanction of the High Commis- 
sioner. In Fiji an attempt was made in 1892 to 
introduce individual tenure in the place of tribal 
and communal ownership, but it was speedily 
abandoned on account of the nature of its first 

In the German colonies the principle that the 
natives are not freely to dispose of their lands Is 
strongly upheld. In some of the possessions, out- 
siders are entirely prohibited from purchasing 
lands from the natives. In the Marshall Islands 
there is a heavy money fine for an offense of this 



kind, and in the Mariana Islands the fine may 
even be reinforced by imprisonment. The laws 
of Kamerun provide that the conveyance of rural 
lands to non-natives must be approved by the 
governor. If lands are bought from the natives 
the conditions of purchase must be brought to the 
notice of the governor or of a designated official 
who must see that the vendor knows the mean- 
ing of his act and that, if communities or chief- 
tains sell land, enough is left for the future needs 
of the natives. In such sales, special conditions 
as to cultivation may be imposed upon the lessee 
or purchaser. In the Marshall Islands the tenant 
rights of the poorer classes have been protected 
as against the land-holding chieftains. 

Land-Holding in Java. The Dutch, in their 
East Indian possessions, have been most careful 
to protect the native population against being 
driven from their holdings by money-lenders or 
European purchasers. During the brief period 
of English power in Java, Sir Stamford Raffles 
made an attempt to introduce individual property 
in land. But upon the return of the Dutch offi- 
cials they immediately abandoned his system and 
reinstated their own, under which the lands of the 
natives could neither be sold nor leased to foreign- 
ers. The only way in which they could come into 
the use of strangers was through contracts by 
which the natives bound themselves to raise a cer- 
tain crop on their lands and deliver it to the other 
party. But such contracts created absolutely no 
lien upon the land, even in case of a total failure 



on the part of the natives to perform. The cap- 
italistic interests of Holland meanwhile demanded 
strongly that land in the Dutch Indies should be 
made alienable. But the government steadfastly 
resisted all attempts to introduce a radical indi- 
vidualistic policy. The law of 1870, however, 
makes the gradual development of individual 
property possible. Under this legislation the 
rights of the natives to their lands are fully recog- 
nized. The state may acquire land only for pub- 
lic purposes and in return for due compensation. 
The law permits partners in a village community 
to have the property divided, and it enables indi- 
vidual proprietors to obtain a written title deed 
and record of their holding. The natives have, 
however, made little use of these methods of 
obtaining individual property rights. In the first 
twenty-five years not more than ten thousand 
hectares were turned into "agrarian property," 
as the individual tenure under the law is called. 
The natives are not permitted to sell their lands 
to non-natives, but they have a right to make 
leases. 1 Lands held by individual inheritance 
tenure may be leased in terms up to twenty years ; 
community lands, up to five years. Two-thirds 
of the members of the community must join in 
the agreement, and enough land must be left for 
the needs of the village. All leases are drawn up 
in the presence of the controleur, in the Dutch and 
in the native language, the latter version prevail- 
ing in case of conflict. 

1 This right was defined and safeguarded by a law in 1895. 


The government of the Philippine Islands has 
followed in the footsteps of the administrations 
of Tunis, Madagascar, French Congo, and 
Borneo, in adopting the Torrens land registra- 
tion system (by Act No. 496, of November 6, 
1902). The act follows the original system in 
most particulars. Registration is optional. Full 
notice to all possible claimants and to the public 
is required. The title deed, which is issued by 
the government, implies a complete guarantee of 
the property right. Upon transfer of the prop- 
erty a new title deed is entered on the books of 
the registry, a copy of which is delivered to the 
purchaser. An assurance fund accumulated from 
a slight tax imposed upon every registration is 
provided for, in order to indemnify persons who 
without their fault are injured by the operations 
of the act. Though customary native holdings 
will not be directly abolished, lands unregistered 
under the Torrens system will be dealt with, as 
is apparent from the language of the law, on the 
principles of allodial tenure, as far as possible. 
It is highly desirable, however, that the right of 
alienation and the creation of leaseholds by the 
natives should be surrounded with safeguards for 
the protection of the latter. 

Methods of Acquiring Land for the Govern- 
ment. The various methods by which colonial 
governments obtain control over lands may 
be grouped under four heads: (i) The gov- 
ernment naturally falls heir to the native rul- 
ers whom it supersedes, and wherever these 



have a definitely settled domain the colonial 
government becomes the owner of it. Thus 
the British government in India has inher- 
ited the claims of the Mogul emperor to the ulti- 
mate ownership of the soil and to the direct con- 
trol over the public domains and forests. The 
Dutch government in Java has similarly taken 
over the various property rights of the native 
governments which it has absorbed. In Algeria, 
the beylik, or domain of the Bey, was appropri- 
ated by the French government, as were the royal 
estates in Madagascar and the domanial rights of 
the emperor of Annam. (2) Lands may be ob- 
tained by direct cession of the native govern- 
ments which are under the protectorate of a 
colonial power. (3) Lands may be taken from 
individual natives through forfeiture or by means 
of restricting native tribes to a certain reservation 
or cantonment. This method has been employed 
especially by the French, in Algeria and in Indo- 
China. Large tracts of land in northern Algeria 
were taken by the government after every one of 
the frequent native insurrections, on the claim of 
forfeiture on account of rebellion. Similarly, 
when the natives of Indo-China in large numbers 
left their villages in order to take refuge in the 
mountains during the Tongking war, the govern- 
ment declared many holdings forfeited and added 
them to the domanial property. The practice of 
"cantonment" has been used in Algeria. Upon 
the representation that the native tribes held more 
land than they needed for purposes of cultivation, 



an enactment was passed which enabled the gov- 
ernment to confine each tribe within narrower 
limits and to take the balance of its land for pub- 
lic uses. This policy reached its height in the 
years between 1857 and 1863, when 61,000 hec- 
tares of cultivated land were taken from the 
natives. The shares of the natives thus cantoned 
were reduced to about five hectares per person 
and, as the tribesmen found this quota far too 
small for their needs, they attempted to buy back 
from the government and its concessionaries the 
lands which had been confiscated. This at- 
tempt conclusively proved to the government that 
the policy of cantonment was unjust and it was 
therefore abandoned. (4) The principle that 
unoccupied lands are the property of the state is 
fully enforced in the colonies and forms the chief 
basis for the acquisition of lands by the govern- 
ment. It is generally difficult to determine with 
exactness what lands are to be considered as un- 
occupied. In many of the colonies cultivation is 
rotatory, taking up different plots of ground in 
succession; or the natives use large forest areas 
for rubber gathering or hunting and extensive 
tracts of open land for grazing. The application 
of European ideas of property to conditions such 
as these, gives rise to much uncertainty and to im- 
proper interference with the customary rights of 
native communities. 

Unoccupied Lands. The legislation of the vari- 
ous colonies attempts with more or less precision 
to define the term "unoccupied lands." For the 



French Congo the following definition has been 
established (1891) : "Waste lands and abandoned 
lands in which no one can legitimately claim a 
right of property shall be considered as belonging 
to the state." In Gambia lands are held to be 
occupied "when it is proved that beneficial use 
thereof for cultivation or habitation, or for col- 
lecting or storing water, or for any industrial pur- 
pose, is or has been had during the life of any 
person claiming interest therein, or of the last 
immediate ancestor or predecessor of such per- 
son/' In Ceylon, lands are considered unoccu- 
pied if they have not actually been cultivated or 
used for industrial purposes within a period of 
six years. A very important practical question 
occurs in connection with the proof of native 
holdings. Some forms of legislation demand that 
the natives shall positively establish the extent of 
their property and that everything not thus 
proven as belonging to the natives shall be con- 
sidered part of the public domain. This policy 
was first employed in Algeria under an ordinance 
of the year 1846, which called upon the natives to 
prove their title to lands which they occupied. 
The natives, however, ignored this order com- 
pletely and any attempt at enforcement would 
have resulted in the greatest injustice and in wide- 
spread popular uprisings. The administration, 
therefore, decided to take the other alternative 
and to establish its title positively by a survey of 
its domain lands. A law in Dahomey which de- 
mands that the natives shall prove their holdings 



is similarly a dead letter. For Kamerun, it is 
enacted that if villages or chieftains claim any 
lands, the attempt shall be made to adjust the 
matter amicably with them and to allow them all 
necessary lands; if such an arrangement is not 
possible, the governor in person is to decide the 
controversy. A special ordinance of the governor 
of German East Africa (April 29, 1900) provides 
that the natives are to be allowed only such land 
as they need for their rotatory culture and village 
communities. After any land has been occupied 
as crown land, natives who settle there are to pay 
a 50 per cent, increase on their hut tax. The law 
of German East Africa reads : "All land that can- 
not be proven to be the private property of a per- 
son or community is crown land/' The system 
actually employed in the German colonies of East 
Africa and Kamerun, however, is to fix the extent 
of the crown lands by an inquest. A land com- 
mission composed of the local officials of the gov- 
ernment and of the native headmen (akida or 
jumbo), is appointed in every district to determine 
the boundaries of the crown lands and settle dis- 
putes. In some of the German colonies the pro- 
cedure of eminent domain may be used by the 
natives to obtain the restoration to them of lands 
necessary for their livelihood. 

Concessions. It is of prime importance for the 
speedy development of a colony that the terri- 
tories which come under the administration of the 
government as a public domain, should be dealt 
out among individuals and corporations in such 



manner as to enlist the largest possible amount of 
enterprise and energy in the upbuilding of agri- 
culture and industry within the colony. The 
principal points of view from which a concession 
policy may be regarded and with reference to 
which an opinion of its character can be formed, 
may be summarized as follows. In the manner 
of granting concessions, it is important to deter- 
mine whether gratuitous concessions or the sale 
of land at auction or at a fixed price is preferable. 
Another alternative to payment presents itself in 
the policy of saddling the concession with various 
duties of a public nature, such as developing com- 
munication, assisting in the maintenance of order, 
and similar matters. The principal consideration 
in this respect is how to make cor cessions attrac- 
tive enough to induce individuals and companies 
to seek them, while at the same time safeguarding 
the interests of the colony and allowing it to share 
in the future increment of value. Ve have also 
to examine the important question whether it is 
advisable to grant concessions conditionally and 
not to allow the concessionary to dispose of his 
interest until he has fulfilled all the conditions 
and has thus secured complete title from the gov- 
ernment. The extent of territory covered and 
the duration of concessions are also matters to be 
carefully considered. In some colonies all con- 
cessions are limited in time and are assimilated 
to leaseholds, but most governments adhere to 
the policy of ultimately granting absolute prop- 
erty rights to the concessionary. The size of the 



concession will of course depend a good deal 
upon the character of the soil and of its resources. 
Extensive concessions are favored for forest re- 
gions, where exploitation is best carried on by 
large capital and on an extended scale, while rich 
agricultural lands are preferably granted out in 
smaller tracts. 

The policy worked out by Wakefield and 
applied in Australia, according to which lands in 
colonies should be sold at a substantial price, is 
not directly applicable to tropical dependencies. 
The main purpose of this policy was to create a 
sufficient labor supply; the absence of free land 
would itself tend to cause the poorer classes to 
seek work on farms, and besides it was intended 
to use the income derived from land sales for the 
purpose of fostering the immigiation of work- 
men. This part of the policy would manifestly 
not succeed in the tropics. The other principle of 
the Wakefield policy still has many adherents 
who believe that a sale bestowing complete prop- 
erty rights is far more attractive to the settler 
and capitalist than a concession hedged with con- 
ditions which involve an uncertain expenditure 
and which cannot be fulfilled for years. But in 
its original and characteristic form, the Wake- 
field system, though highly ingenious, could not 
furnish the basis of a land policy for the tropics. 

It has been the steadfast policy of the Dutch 

colonial government to reserve enough land for 

the expanding needs of the native population. 

According to the customary law of Java, any 

22 337 


native who clears land is entitled to possession of 
it unless it be the property of a village community. 
A large area of land which is undoubtedly suit- 
able for agricultural purposes is still in the hands 
of the government, and the latter is not at all 
anxious to dispose of it in haste. The conces- 
sions of land to non-natives are limited to leases 
for a period of seventy-five years (emphyteusis) . 
The lease is sold at auction, but the intending 
lessee may select a certain tract to be put up, in 
which case, however, he must pay the cost of sur- 
veying. The lands conceded are exempt from 
rent for the first six years, and from taxes for the 
first ten. Before 1816, land was sold outright to 
Europeans, and over one million acres are now 
held under titles acquired at that time ; but since 
the year mentioned no permanent grants of land 
have been made by the government to Euro- 
peans. The total land ceded in emphyteusis 
amounted by the year 1901 to slightly over one 
million acres, or one-thirtieth part of the area of 
Java and one-ninth of the cultivated territory. 
These concession tracts are all located in the 
highlands, where practically no cultivation had 
existed before. They are suitable for coffee, tea, 
and cocoa culture; and as European capital 
develops them, it is adding absolutely to the 
wealth of the colony, because it does not displace 
and oppress native industry by superposing a 
landlord class upon the native peasant tenants. 
In Algeria the first concession policy, laid down 

in the decrees of 1841 and 1851, limited grants to a 



maximum of 100 hectares. The grants were pro- 
visional and could not be freely sold or mort- 
gaged 1 until the conditions of tenure had been ful- 
filled and the title had matured. Though the 
concessions were gratuitous, a substantial cau- 
tionary sum (10 fr. per hectare) had to be depos- 
ited with the government. Much dissatisfaction 
with this system was expressed because the colo- 
nists encountered many difficulties in pledging 
their land as security, even after they had done 
considerable work upon it ; as they often had no 
other security to give for advances, it was urged 
that the development of the country was retarded 
by making the conditions for a complete title too 
arduous. In 1860 the system was changed, and 
the land was put up for sale at a fixed price or at 
auction. This was a part of the general policy 
of the Empire at that time, which aimed at pro- 
tecting the natives and solving the native ques- 
tion, before encouraging a great flow of immigra- 
tion. In 1871 the Republican government re- 
turned to the earlier concession policy; colonists 
could hypothecate their land, but the lien at- 
tached solely to improvements until the title had 
matured. There was a great demand for con- 
cessions, and in 1883 ** was proposed to make a 
forced purchase of land from the natives under 
the forms of eminent domain. This proposal, 
happily for the good name of France and the wel- 

* Under the earlier decree, a special mortgage could be 
authorized by the administration. Under the later, the colo- 
nist received a title defeasible for non-performance of the con- 
ditions imposed. 



fare of the natives, was not accepted by the gov- 
ernment ; it was recognized as being too open an 
attack upon native property rights. 1 Accord- 
ing to a decree of 1878, one-third of the public 
lands available for concessions are reserved for 
grants to colonists already in Algeria, while two- 
thirds are given to those coming in from France 
or other countries. The policy of this measure 
is to attract larger numbers of colonists to Al- 
geria, and to prevent the accumulation of real 
property in the hands of persons already there 

Indo-China, like Java and Ceylon, has a rich 
and promising hill country, which has scarcely 
been touched by native cultivation. It would 
therefore have been practicable for the Indo- 
Chinese government to confine European conces- 
sions to land not as yet used for native cultures. 
But through a desire to attract colonists, lands 
temporarily abandoned by natives in time of war 
were frequently granted out to Europeans. 
When the refugees returned from the forests to 
which they had fled they found a French conces- 
sionary in possession. In order to be able to live 
on their ancestral acres, they were forced to be- 
come tenants of the new landlord and share the 

1 The holdings of European colonists in Algeria amounted 
in 1878 to one million hectares. From that time to the year 
1903 they have risen to 1,500,000 hectares of cultivated land. 
As there are 189,000 European colonists (men, women and 
children) in Algeria, the average per head is slightly under 
eight hectares. The native holdings of cultivated land 
amount to 6,161,000 hectares, or about i 1 /* hectares per head 
of the population. 



produce of the soil with him, on the metayer sys- 
tem. It is apparent that a procedure of this kind 
is not calculated to increase the wealth of a col- 
ony. Where the concessionary is made the 
owner of highly cultivated lands, with a well- 
trained labor population at hand, he will lack the 
incentive to invest much money in improved 
methods of agriculture and in machinery ; he will 
find it easier to share the results of the work done 
by the natives, himself adding little or nothing to 
the wealth and welfare of the country. The func- 
tion of European capital and of concessions in the 
colonies is quite different from this ; it is to intro- 
duce new cultures and to bring under cultivation 
territories not yet cleared by the natives. The 
policy of superposing new landlords upon a native 
tenancy could be defended only on the ground 
that through the introduction of improved meth- 
ods they would render the labor of the peasants 
more productive, so as to leave the natives better 
off than they were before. It is, however, under 
any circumstances an unwise and dangerous 
policy to allow such a superposition. Of course 
not all of the French concessions are of this 
nature; they include also grants of large tracts 
which had not before been under cultivation. 
Nor do the concessionaries always have the 
delightful road of ease and abundance to travel; 
they often find it difficult to induce tenants to 
come upon their lands and work for them on the 
profit-sharing basis or as wage laborers. Even 
after they have fitted out a group of tenants with 



implements and beasts of burden, they are not 
assured of a labor supply, because the tenants 
often change their minds and quietly remove to 
some other locality. Many a concessionary has 
given up the battle, recognizing that he lacked 
the experience of local conditions necessary to 
render his undertaking successful. The conces- 
sions grew remarkably in extent and numbers 
under the administration of Governor Doumer. 
By the year 1896, 288 concessions had been 
granted, covering an area of 65,000 hectares. In 
1901 the number had risen to 717, comprising 
357,500 hectares. This represents an increase in 
area of nearly 500 per cent, in five years. The 
laws of Indo-China require that at least one- 
twentieth part of the land ceded must be placed 
under cultivation within five years. Concessions 
not thus developed are forfeited, and the laws of 
forfeiture are rather strictly enforced. Thus in 
1904, 26,000 hectares were taken back by the 
state for non-fulfillment of conditions. 

The government of British India has at its dis- 
posal a great area of so-called waste lands, which 
under the laws for the various provinces as pro- 
mulgated in 1865, may be granted out to individ- 
uals. The original concession is in the form of 
a term of years, but this lease may ripen into full 
ownership if a certain proportion of the land has 
been brought under cultivation within a specified 
time. The rules also usually make a distinction 
between extensive grants, suitable for the pur- 
pose of plantations in which large amounts of 



capital are invested and agriculture is carried on 
in an industrial manner, and smaller concessions 
adapted for individual gardens or farms. The 
British government has been careful not to grant 
to foreign concessionaries any lands already 
effectively occupied by native cultivators. For- 
eign capital is required to make itself useful by 
developing lands hitherto not utilized. The same 
policy has been followed in Ceylon. The great 
tea estates, which constitute one of the world's 
most important agricultural industries, are situ- 
ated in the highlands, which were formerly a 
wilderness untilled by the natives or at most 
sporadically invaded by the destructive and tem- 
porary mode of clearing called chena burning. 
The Congo Concessions. The concession pol- 
icy of tropical Africa has been given an entirely 
original turn by the methods of exploitation used 
in the Congo Independent State. Immediately 
after the creation of the State in 1885, the govern- 
ment announced that all unoccupied lands would 
be looked upon as belonging to the government. 
But this well-known principle was given a very 
unforeseen development after 1890. In that year 
the Congo State obtained from the European 
powers the right to tax imports up to a maximum 
of 10 per cent., and feeling its existence somewhat 
more secure, it launched forth into its famous 
exploitation policy. In 1891 a decree was issued 
to the commissioners of the northern districts, 
calling upon them to use every effort to secure the 
domanial products for the State. In carrying out 



this decree the district officers ordered the natives 
to bring the forest products to the warehouses of 
the State and they also announced that mer- 
chants who henceforward should purchase rubber 
or ivory from the natives would be dealt with as 
having received stolen goods. In 1892 the Congo 
State was divided into three zones. The north- 
ern portion was set apart as the private domain of 
the state (domaine prive) ; within it all individual 
enterprise was strictly forbidden, and the natives 
were forced to deliver all the rubber and ivory 
which they were able to procure in the forest, to 
the agents of the government. In the second, or 
southeastern zone, private enterprise and private 
acquisition of land were forbidden until further 
ordinances respecting them should have been 
made. Such ordinances were, however, never 
issued; the zone remained effectually closed to 
private trade and became the field of operation of 
the Katanga Company, in which the government 
is interested and out of the profits of which it 
takes a two-thirds share. The third zone, the 
southwestern part of the State, was avowedly left 
open to private enterprise. But the conditions 
laid down for trade were so onerous, the taxes 
were so heavy, that only such companies as could 
secure special concessions and privileges found 
it possible to carry on business in this region. In 
the year 1901, fourteen of these companies were 
consolidated into a large trust, the Kasai Com- 
pany, in which also the State is the largest par- 
ticipant. By a special agreement the Kasai Com- 



pany is given the exclusive privilege of exporting 
forest products from this region. The State 
takes one-half of the profits of the trade. Regu- 
lations for the sale of land in this zone have been 
issued, but the terms are made so difficult and 
the area within which sales are actually allowed 
is so small, that only a very inconsiderable num- 
ber of transactions of this kind are to be recorded. 
The situation in the Independent State is there- 
fore practically as follows. The State, either 
directly or through privileged companies, in the 
profits of which it has a large share, exploits the 
forest wealth of its territories. Individuals or 
companies who have not been favored with the 
grant of special privileges find it impossible to 
carry on commerce under these conditions, and 
the old established houses which formerly dealt 
most heavily in the native products of the coun- 
try have gradually been forced to withdraw. 

This concession policy has been attacked by 
publicists on the ground that a monopolization 
of the soil and its products interferes with the 
provisions of the Berlin General Act of 1885, 
which requires that the commerce of all nations 
shall enjoy perfect freedom and that none of the 
powers that exercise sovereign rights in the 
Congo region shall ever establish "monopolies or 
privileges of any kind which relate to commerce." 
In answer to this it is urged by the defenders of 
this policy that the state has an acknowledged 
right to appropriate unoccupied lands, and that 
it can exercise an absolute dominion over them. 



It may retain them for its own use or it could 
grant them to whomsoever it pleased, in large or 
small tracts. The natural products of the soil 
belong, not to the natives who gather them, nor 
to the merchants who purchase them, but to the 
owner of the land. He can therefore prohibit the 
natives from gathering these products and from 
selling them to merchants. They must be 
brought to authorized warehouses, for in this 
manner alone can the proprietor draw profit from 
his estate. Although it is readily conceivable 
that a legal institution may be put to new and 
unexpected uses, it is nevertheless apparent that 
the institution of public land, as known to civil- 
ized jurisprudence, does not include the conse- 
quences drawn from it by the jurists and admin- 
istrators of the Congo State. It is true, the state 
may appropriate waste and unoccupied lands; 
and it may dispose of these to individuals. But 
the public law which has established these prin- 
ciples has also held to the fundamental rule that 
a domain of this kind must be looked upon as a 
trust administered for the whole people. No 
civilized state has heretofore excluded all private 
enterprise from such a domain. No civilized 
state has ever confined the use of this public 
property to certain favored monopolistic com- 
panies. Such a domain ought to be regarded 
as a public trust for the inhabitants of a colony, 
and for persons who desire to come there in 
order to make their home in a new region or to 
develop its resources that js the proper concep- 



tion of this institution according to an analysis 
of the systems from which the Congo Free State 
has borrowed its juristic arguments. The Congo 
State has turned what should be a public trust 
into the instrument of altogether destroying indi- 
vidual enterprise and of turning the whole vol- 
ume of business into channels dominated by 
favored companies. 1 

In the Congo State the policy of large conces- 
sions has led to a ruthless exploitation of the nat- 
ural wealth. It is true, the laws of the state 
require a systematic replenishing of the forests, 
and the state agricultural stations are doing a 
fairly effective work, but the rage for quick profit 
is so great that a terrible pressure has been put 
upon the natives to force them to gather the nat- 
ural products in large quantities. In order to 
avoid fines and punishment they therefore seek 
only to gather rubber, without any thought of 
preserving or replanting the productive vines. 
Millions of acres have thus already been robbed 

1 Among the many regrettable consequences which this 
policy has brought with it, not the least is the introduction oi 
stock gambling into colonial administration. On account of 
the peculiar methods of exploitation employed by the govern- 
ment and its favorite companies, many of the latter were en- 
abled to pay enormous dividends. Thus the Abir Company in 
1901 declared a dividend of 900 francs on its shares of a par 
value of 1,000 francs. The stock at this time sold in the mar- 
ket for 25,000 francs a share, while the capital originally paid 
in was the i25th part of this, or 200 francs. Similar instances 
were common. This almost fabulous increase of value led to 
a vast amount of stock speculation. Inflated issues were put 
upon the market, and when, shortly after, the day of reckon- 
ing came, millions were lost. Money which was intended for 
colonial investment thus found its way into the pockets of the 
successful speculators. 



of their productivity for decades to come. The 
disastrous consequences of this system upon the 
condition of the natives will be touched upon in 
the next chapter. 

The concession policy of the Belgians in the 
Congo Free State has had a potent effect upon 
the neighboring colony of French Congo. In 
1898 powerful interests began to press for large 
concessions in that colony. A Commission of 
Colonial Concessions was created in that year, 
and in 1899 the policy of large land grants was 
initiated. Before the year was ended 42 com- 
panies with 60,000,000 francs of nominal capital 
had been organized, and very nearly the entire 
area of the colony had been granted out in conces- 
sions to these newly formed corporations, in most 
of which Belgian influence was more or less 
prominent. This was done regardless of the fact 
that the Congo colony was neither surveyed nor 
even superficially explored, and that an accurate 
delimitation of the concessions was therefore 
impossible. Very few men were at all familiar 
with the interior regions of French Congo, and 
for any definite information the concessionaries 
had to rely chiefly upon Belgian employees of the 
Congo Free State. The concession legislation 
which was worked out at this time by the French 
government provides for private and auction sales, 
but chiefly for gratuitous concessions. Grants of 
less than 10,000 hectares may be made by the 
colonial government ; if a larger area is desired, a 
ministerial decree is necessary. The concessions 



are limited in duration to a period of thirty years, 
but such lands as have at the end of that time 
been put under cultivation become the absolute 
property of the concessionary. Lands will be 
considered as under cultivation if one-twentieth 
of their area has actually been planted to rich cul- 
tures, or one-tenth to food grains. During the 
thirty years of the leasehold the company pays to 
the government a share (15 per cent.) of its net 
proceeds. It is further provided that for every 
ton of rubber which has been harvested, at least 
150 rubber plants shall be set out. The conces- 
sion companies are required to provide for steam- 
boat transportation on the navigable rivers, and 
to permit the government to make use of this 
service for military and postal purposes. 

None of the forty-two concessions in French 
Congo is less than 10,000 square kilometers in 
extent, while the largest covers an area of 140,- 
ooo. Altogether 750,000 square kilometers were 
thus granted out, or nineteen-twentieths of the 
total area of this dependency. It would be diffi- 
cult to imagine a more reckless policy of dispos- 
ing of public lands, than to grant out an empire 
of this size to forty concessionaries in a few 
months, entirely excluding all others who did not 
happen to bring their influence to bear immedi- 
ately. As a matter of fact, the companies have 
thus far done very little towards the development 
of the colony. Most of them suffer from an 
inadequacy of funds, having entered upon the 
undertaking in the belief that a harvest of gold 



easily gained through the labor of the natives 
would soon make good the financial importance 
of the company. Those who took up their work 
found great difficulty in locating their concessions 
in the impenetrable wilderness of African forests. 
When located, many of them turned out to be 
composed of absolutely worthless marsh lands, or 
they were too remote for profitable exploitation. 
The quotations of the securities of these com- 
panies were largely nominal, and actual dealing 
in them was confined to a small number of stocks, 
although there was a great rush of promoters. 

The French government in 1902 appointed a 
special commissioner for the concession com- 
panies. Many complaints had been made by 
these latter that the conditions imposed by the 
government were too arduous and that the gov- 
ernment itself should, after the manner of the 
Congo Free State, assist the concessionaries in 
drawing profit from their holdings. They urged 
that a native army should be created, and that 
the natives in general should be forced to gather 
the forest products for the concessionaries. It is 
to be hoped that the French government, always 
ready to assist colonies, will not go the length 
of introducing the forced labor system of the Free 
State. The mammoth concession policy is appar- 
ently doomed to hopeless failure, and a more solid 
system must take its place. The legislation cre- 
ated for the French Congo has by decree been 
extended to the French colonies of West Africa ; 
but concessions of over IO,OOQ hectares have not 



been granted as yet, and indeed the extensive use 
of large concessions is rendered impossible both 
on account of the constitution of native property 
and on account of special treaty obligation 
towards Great Britain, which forbid the monopo- 
lization of trade after the manner of the Congo 
Free State. 1 

In general, French colonial concessions are 
granted provisionally upon condition that a cer- 
tain amount of development work shall be per- 
formed. The question whether the title to con- 
cessions can be transferred, is answered differ- 
ently in different colonies. In the French Congo 
a transfer may be made with the consent of the 
government, which is withheld when it is appar- 
ent that a mere accumulation of land is sought 
after. In Madagascar, concessions can be trans- 
ferred only after all the conditions are fulfilled. 
In the latter colony concessions up to 100 hectares 
are gratuitous, while larger tracts are sold at a 
fixed price. In French colonies a distinction is 
made between the domaine public, composed of 
lands held inalienably by the state for public pur- 
poses, and the domaine prive, or public lands 
which may be alienated to individuals. 

The legislation in force in the colony of Kam- 
erun may be taken as a fair example of the Ger- 
man colonial land systems. It is enacted that 
whenever crown land is reserved, the natives shall 
be left a sufficient area for their future needs. 

1 In Guinea and Senegal, the maximum of grants is fixed at 
5,000 ana 10,000 hectares respectively. 



Concessions of crown lands are granted upon con- 
dition that a certain portion of the land shall be 
cleared and cultivated within a specified time, 
that buildings shall be erected, and other works 
of development begun. Punishment for non- 
fulfillment of these conditions is forfeiture of the 
concession or a fine. The policy of large conces- 
sions for a time predominated in Kamerun. In 
1898 there was formed at Brussels the Society of 
South Kamerun, which was successful in obtain- 
ing an enormous concession of 7,000,000 hectares, 
or 27,000 square miles. In 1899 the Society 
of Northwest Kamerun, formed in Berlin, ob- 
tained an even larger tract. The conditions 
attached to the grant are that the company must 
spend three million marks in development within 
ten years, and that the government is to share in 
the benefits of the enterprise. It is not likely 
that the German government will grant any fur- 
ther concessions of this size. On account of its 
rights as a pioneer, the German East Africa Com- 
pany was granted in 1890 extensive land conces- 
sions along the coast and along railroads to be 
constructed up to the year 1935. Moreover, the 
company receives one-half of the government's 
income from land rents and from mine royalties. 
The land policy for British East Africa was 
fixed by the Crown Lands Ordinance of 1902. It 
comprises three classes of concessions adapted to 
the needs of the small native peasant, the farmer, 
and the planter. Lands will be granted either by 
long lease, or by sale, or by license for temporary 



occupation. The latter form is used in the case 
of natives or other non-Europeans. It is really 
a lease from year to year, requiring three months' 
notice of cessation ; not more than five acres are 
thus to be held, and a moderate rental is paid. 
The rules for the purchase of lands are as follows : 
160 acres may be purchased for each homestead, 
and each purchaser may have 480 acres more, if 
within three years he has brought three-tenths of 
the original land under cultivation. The pur- 
chase price is paid in sixteen annual installments 
of two annas (4 cents) per acre. The land must 
be occupied within a year. When all conditions 
have been fulfilled a deed is granted, but before 
this the purchaser cannot assign his interest with- 
out the consent of the government. Long leases 
may be granted to larger tracts, but they are 
limited to the period of 99 years. They must not 
encroach upon the native holdings, and cannot be 
transferred without the consent of the govern- 
ment. The leaseholder must assist the public 
administration in opening up the country, in 
building roads, and contributing in general to the 
establishment of good government. It is further 
decreed that ten per cent, of the land is to be kept 
as permanent forest. In regions where there is 
no forest at all, two per cent, of the land is to be 
planted to forest trees. The East Africa ordi- 
nance is the most recent and most complete 
attempt to solve the question of colonial conces- 
sions. Large concessions are granted only in the 
form of long leases, while outright sales are con- 
23 353 


fined to such tracts as are suitable for individual 
farms or plantations. Moreover, a very useful 
system of native leasehold tenure is provided. 
Altogether this ordinance may well be used, if not 
as a model, at least as a means of comparison for 
colonial land policies. The Transvaal Crown 
Lands Ordinance provides that lands may either 
be leased in small parcels for five years, or sold 
for cash, the payment being made in sixty semi- 
annual installments. 

The public land system in the Philippine 
Islands is modeled partly upon the homestead 
laws of the United States. 1 Any citizen of the 
United States or of the Philippine Islands may 
enter a homestead of not exceeding 16 hectares 
of agricultural land; after five years of continu- 
ous residence upon, and cultivation of, the land a 
patent is issued to the occupant. Portions of the 
public domain may also be sold to citizens or cor- 
porations of the United States and the Philippine 
Islands, but not in tracts exceeding 16 hectares 
for an individual or 1,024 hectares for a corpora- 
tion ; the area limit was fixed by Act of Congress 
and is not favored by the Commission itself, 
which considers it too small for plantation enter- 
prises. The land selected by the applicant is to 
be appraised by the Bureau of Public Lands, but 
not at less than ten Philippine pesos ($5) per 
hectare, and is then put up at public auction. 
Provisions are also made for the lease of public 

x Act 926 of the Philippine Commission, 1903. 


land at a minimal rental of fifty centavos per 
hectare and per year. 

Mining Concessions. Mining concessions are 
derived directly from the government wherever 
the latter has assumed and reserved the property 
right in all minerals, as is the case in Rhodesia, the 
French colonies, and German East Africa. In 
the British West African protectorates and in 
Nigeria, on the other hand, concessions must be 
obtained by grant from the native chiefs in the 
form of leases. In these latter dependencies, a 
concession for gold mining must not exceed five 
square miles, and no person or company is 
entitled to hold concessions aggregating more 
than twenty square miles; the concessions can- 
not be granted for more than 99 years ; and it is 
provided that a share of the profits be paid to the 
government, outside of the concession price paid 
to the chiefs. In Ashanti the contract of cession 
can be entered into only before a Resident, who 
must ascertain whether the grant is well consid- 
ered and whether the chiefs are ready to cooper- 
ate in securing a supply of labor. 

In the French and German colonies prospect- 
ing can be carried on only within a definite loca- 
tion. 1 If gold is found a smaller exploitation con- 
cession is fixed within the original area. This is 
not to exceed 800 hectares in West Africa and 
one square kilometer in Madagascar. The mines 
pay a tax computed according to acreage and also 

1 In Madagascar a circle of a radius of two kilometers ; in 
West Africa five kilometers ; in German East Africa a quad- 
rangle of 200 x 400 meters. 



a percentage (5 per cent.) of the gross value of 
the product. In Rhodesia prospecting may be 
undertaken both on public and on private land. 
The prospecting license is not confined to any 
definite tract, and it gives the right to peg off ten 
reef claims (1,500 feet x 600 feet), or a tunnel 
location, or an alluvial claim. No limitation is 
imposed on the number of claims to be held by 
any person or company. The British South 
African Company originally reserved to itself a 
half interest in all claims; in 1902 its share was 
reduced to 30 per cent. In the latter year 107,- 
586 claims had been registered in Rhodesia, of 
which 2,018 were productive. It is an all but 
universal rule in colonies that government offi- 
cials shall not be permitted to have any interest 
whatever in mining claims or concessions. 



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DOUMER, La Situation de 1'Indo-Chine. 287. GALLIENI, 
Rapport d'ensemble. Part II. 280. Deutsche Kolonial- 
gesetzgebung. Edited by RIEBOW and ZIMMERMANN. -Eind- 
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op den grond op Java en Madoera. Batavia, 1876-1896. 3 


ASPE-FLEURIMONT, Le Congo frangais. Q. D. C. 12: 


586. BADEN-POWELL, B. H., Land Systems of British India. 
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Erfelijk Bezit op Midden Java. Leiden, 1881. Boos, CH., 
"Les concessions du Congo." Q. D. C. 16:181. BOUR- 
DARIE, P., "Le Congo frangais." Q. D. C. 11:213. 
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P. 189. Conferences sur les administrations tunisiennfcs. 
Sousse, 1899. 193. COUSIN, A., Concession colomale. 
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1904. DIANOUS, P. DE, Notes de legislation tunisienne. Ch. 
7. DISLERE, P., Traite de legislation coloniale. Part I, p. 
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Both commercial and industrial interests in the 
colonies demand that the capacity of the natives 
for work should be fostered. Life in the tropics 
is so easy, necessaries are procured with so little 
exertion, that the natives have not generally been 
accustomed to steady toil. Where regular agri- 
cultural work has been done it has often fallen on 
the shoulders of the women, especially among the 
tribes of the southern half of Africa. But if the 
plantation and mining districts in the tropics arc 
to be developed, the native males will have to 
become accustomed to work more regularly and 
with greater energy than heretofore. Their nat- 
ural capacity and inclination to work being sub- 
ject to doubt, a large variety of methods have 
been suggested by which habits of industry 
among them might be artificially fostered. We 
shall take up first a discussion of the methods 
which have been employed in the colonies for this 
purpose, and then consider in general the ques- 
tion as to how far artificial means of encourage- 
ment are necessary and advisable for bringing 
out the full working capacity of native populations. 

Indirect Methods: Taxation. The most favor- 
ite indirect method of inducing natives to work 



at least for a portion of the year, is to levy a hut 
tax or poll tax to be paid in money, which the 
natives must obtain by working for white em- 
ployers. The hut tax as used in Rhodesia, Natal, 
Transvaal, 1 and other South African colonies, and 
recently introduced into the colonies of East and 
West Africa, is generally intended for this pur- 
pose, especially where it is large in amount. An 
impost of one or two pounds sterling a year, con- 
sidered purely as a tax, is entirely out of propor- 
tion to the financial ability of the ordinary native, 
in relation to his general property. It is, how- 
ever, not intended merely to operate as a tax, but 
as a method of obliging the natives to work regu- 
larly. 2 Another method of using the machinery 
of taxation for the purpose of obtaining a labor 
supply, is the system introduced in South Africa 
through the Glen Grey Act of 1894. According 
to this act, all adult natives who are not landhold- 
ers must pay a tax of ten shillings a year, unless 
they can show that during the last year they have 
spent at least three months outside of their reser- 
vation engaged in regular service or employment. 
After thirty-six months' work has been per- 
formed, they are excused from the liability to 
further taxation. 
Vagrancy Laws. Another indirect method of 

1 In the Transvaal every adult native pays a head tax of 2, 
and a further tax of 2 for every wife above one. See p. 139. 

a The introduction of a high hut tax into West Africa has 
been seriously opposed by many expert authorities. They 
have confidence enough in the West African negroes to be- 
lieve that even without this artificial pressure they will soon 
furnish sufficient labor. 



increasing the labor supply is the application of 
European vagrancy laws to colonial possessions. 
After slavery had been abolished in the old 
French colonies, it became necessary to make 
some regulations in order that the labor supply 
might not entirely fail. After their long train- 
ing in the school of slavery, the freedmen were 
desirous of getting thoroughly rested up. The 
legislators had recourse to contract labor laws 
combined with penal provisions against vagrancy. 
The term "vagrant" was defined so as to embrace 
all persons who were not landholders or artisans 
regularly employed in their trade and who could 
not prove that they were engaged upon a labor 
contract for at least one year, or carried a livret, 
a book showing their continuous labor engage- 
ments. The same system was introduced in 
Madagascar by the labor legislation of 1896. In 
a similar manner the Germans have attempted 
to enforce the European vagrancy laws in some 
of their African colonies. In neither case, how- 
ever, has this attempt been successful, as it proved 
difficult to enforce penalties for "vagrancy." In 
the French Antilles the freedmen sought to secure 
a little patch of ground and thus became land- 
holders, whereupon they rested content with rais- 
ing only what was absolutely necessary for their 
existence. In the Dutch colony of Surinam, this 
reversion to a banana-patch civilization was fore- 
seen by the legislature when slavery was abol- 
ished; emancipated slaves were therefore for- 
bidden to cultivate bananas, and existing banana 



trees were destroyed in large numbers. An orig- 
inal method of changing the employment of 
natives and turning them towards agriculture has 
been applied in German East Africa. Since 
the natives frequently use employment as carriers 
as an excuse for loafing, a tax of one rupee per 
trip has been imposed on every carrier, while for 
transporting goods by wagon or pack animals no 
such tax is levied. This impost serves several 
purposes ; it encourages the use of beasts of bur- 
den, it provides a fund for road-building, and it 
places the carriers under a disadvantage, so that 
they may be induced to seek employment in agri- 

Expropriation. When natives are deprived of 
the lands from which they have thus far derived 
sustenance, they are obliged to seek employment 
upon the plantations of colonists in order to make 
a living. In this manner a considerable number 
of the natives of Algeria were reduced to the posi- 
tion of proletarian laborers, after their lands had 
been subdivided, or confiscated on the ground of 
forfeiture for rebellion against French authority. 
The most flagrant modern instance of this method 
is furnished by the Congo Free State. When the 
government carried out its policy of claiming all 
unoccupied lands, it practically engaged in a 
wholesale expropriation of the natives from terri- 
tory which they had in one way or another 
utilized ^before the coming of the Belgians. 
These lands now embraced in the state domain, 
or in the concessions of privileged companies 



upon which the natives had gathered forest prod- 
ucts and which they had used in rotatory cultiva- 
tion, had always been regarded by them as their 
communal or tribal property. Being deprived 
of the right to gather forest products for them- 
selves, they are perforce driven to work for the 
state or its concessionaries. 

Labor Contracts. The principal method by 
which natives are induced to work and are re- 
tained for long periods of time as employees, con- 
sists of contracts provided with a penal sanction. 
Contractual obligation is itself, of course, in har- 
mony with the most individualistic liberty. If 
laborers are permitted freely to choose their 
employers, and to bind* themselves only to those 
provisions with respect to wages, length of ser- 
vice, and kind of work, to which they freely con- 
sent, no diminution of liberty can be said to take 
place. But a contract of this kind, looked upon 
merely as an institution of the civil law, is not 
sufficient for the purpose of keeping the native 
laborers steadily at work. Should they break 
their engagement, the employer demands a more 
sufficient remedy than a judgment of damages, 
which would in most cases be valueless. A penal 
clause is, therefore, added to these contracts, so 
that in case the laborer fails to perform his part, 
or performs it in a careless or inefficient manner, 
he may be punished, and will not be subject 
merely to a judgment of damages. 

In many regions a system of credit bondage 
has grown up. Advances are made to laborers 



by employers at the time of the hiring, and the 
former are then obliged to work off the debt which 
they have thus incurred. When they have suc- 
ceeded in paying off the first debt, they have 
usually, through their want of foresight, become 
indebted anew to their masters, so that they are 
gradually forced into a position of permanent 
dependence. Rubber gatherers along the upper 
Amazon are usually held in this form of serfdom 
by the merchants on the river. The Mexican 
planters use the system of advances in order to 
acquire a labor supply, and the laws of the state 
oblige the laborer faithfully to work off his 
indebtedness. In case of his failure to do so, he 
may be drafted into the army, which is looked 
upon as an unwelcome alternative by the moso. 
In Java this system was in existence before the 
coming of the Dutch, and it has maintained itself 
there in a modified form down to the present. It 
was also formerly used in the Philippine Islands. 
As in these countries employers find it practically 
impossible to secure la'borers without advancing 
a large sum of money, the planters have some 
cause to demand efficient means of holding the 
laborer responsible ; otherwise it would be a very 
easy matter for him to take up several engage- 
ments at the same time with no intention of keep- 
ing any of them. 1 

1 Credit bondage is prevented in German East Africa by the 
provision that the employer is not to advance goods or money 
to the laborer exceeding in value the amount of one month's 
pay. Goods furnished beyond this amount cannot be recov- 
ered, nor the purchase price sued for. 


In the Dutch East Indies, the nature of the 
penalty attached to the breach of a labor con- 
tract was changed in 1879. Before that date such 
a breach was punishable by fine and imprison- 
ment; but the law of 1879 restricts the penal 
sanction by providing that "whoever, with the 
purpose of defrauding a master or employer 
against the law, has received money or the value 
of money by way of advance for work which he 
has failed to perform, shall be punished with 
forced labor, for from one to six months." The 
penalty provided in this law applies therefore 
only to those cases in which it can be proved that, 
at the time of entering into the contract, the 
laborer had a fraudulent intent; if he actually 
enters upon the employment and leaves it later for 
some other cause, without fulfilling his engage- 
ment, he cannot be prosecuted in a criminal action. 
The law also provides that penal actions against 
laborers must be brought before the regular crim- 
inal court and not before police magistrates. 

In most of the other colonies where the penal 
contract exists, punishment is incurred by any 
breach of the contractual obligations, not simply 
by entering into it with a fraudulent intent. 
The punishment consists of the loss of money or 
wages and of imprisonment; in some colonies 
even flogging is resorted to. In the German col- 
onies of New Guinea, East Africa, and Kamerun, 
the latter is a regular method of punishing 
breaches of labor engagements. Thus an ordi- 
nance of 1900 for New Guinea provides that col- 



ored laborers who are guilty of breach of duty, 
laziness, insubordination, or escape from their 
place of work, may be punished by fines, solitary 
confinement, and corporal punishment. The 
punishment cannot be imposed by the employer, 
but only by an official authorized to judge in dis- 
ciplinary matters. Flogging is limited to twenty- 
five lashes, and must be inflicted in the presence 
of an official or of a European specially desig- 
nated by such official. 

For the protection of the natives the labor con- 
tracts are by legislation surrounded with a large 
number of safeguards. The contract must ordi- 
narily be made in the presence of some official or 
other specially authorized person. As an illus- 
tration of the various provisions usually made, 
we may take the ordinance of the governor of 
Kamerun, of February 14, 1902. This measure 
provides that recruiting of laborers can be under- 
taken only after written permission has been 
obtained from the government. This permission 
will be confined to definite regions, a definite 
number of laborers, and a limited time. Permis- 
sion can be withdrawn for any reason of public 
policy. The employer must furnish the govern- 
ment a full list of all laborers recruited. Con- 
tracts must be in writing, and their contents must 
be explained to the natives by an interpreter. 
The contract must contain provisions on the fol- 
lowing points: (i) nature of the work, (2) local- 
ity, (3) duration of the contract period, (4) length 
of the labor day, (5) amount of pay, (6) nature 



of food and lodging, (7) care in case of sickness, 
(8) provisions for return home. It is required 
that the labor day is not to exceed ten hours, and 
that payment is to be made only in German coin. 
Medical care is to be provided by the employer, 
who must also pay the cost of the return of the 
laborer to his home. For the supervision of the 
relations between laborers and employers, labor 
commissioners are appointed in the various dis- 
tricts. They are to exercise special control over 
the housing and general care, the pay, the treat- 
ment, and the transportation of the laborers. 
They have at all times the right of admission to 
the plantation, and must also be ready to hear 
complaints of the laborers. A labor commis- 
sioner also has the right, upon complaint of the 
employer, to order disciplinary punishment of 
offending laborers. 

Contract labor has been in use in the Assam 
tea regions of India since the creation of the tea 
industry. The period of the contract is limited 
to four years, and detailed regulations with 
respect to the protection of laborers are made. 
Meanwhile unlicensed or uncontrolled recruiting 
has been going on alongside of the regulated sys- 
tem, but this form of hiring has been discouraged 
by the local governments which, under an act of 
1901, have the power to interfere. In 1900 the 
total number of laborers who entered Assam 
under contract was 62,733. The figure was 
unusually large on account of the famine in India, 



which drove many natives of central India to 
seek a livelihood in this manner. 

The South African colonies and the Gold Coast 
Colony also use the penal contract system. In 
the diamond mines of Kimberley, the escape of 
the natives and the illicit dealing in diamonds are 
prevented by imprisoning the laborers in com- 
pounds during the entire period of their contract. 
On the whole, the administration of the com- 
pounds has been efficient, so as to reduce the dan- 
gers of the system to a minimum. In Natal labor 
agents must take out a license, and all contracts 
with the native laborers must be registered. 
Wages are to be paid in full without deduction 
for objects that may have been furnished the 
workmen. An act of 1902 contains the provision 
that "togtmen" (native day laborers) must reg- 
ister and reside in a special compound. In Brit- 
ish New Guinea, too, labor touts are required to 
have a license; and it is provided that natives 
shall not be taken more than twenty-five miles 
from their home. The obligations of the engage- 
ment are distinctly specified in the law, and the 
contract may be annulled by the magistrate for 
cause. In the French Congo a decree of 1903 
regulates the labor contract. It must be con- 
cluded before an agent of the administration in 
the presence of the laborers. The conditions 
must be recorded, and it must contain full terms 
as to payment and care of workmen, length of the 
working day, and adjustment of differences. The 
contract period in the Congo Free State is unuu- 



ally long, being seven years. The punishment 
for breach of, the engagement is a fine up to 500 
francs and imprisonment up to six months. 

Imported Contract Labor. An important traf- 
fic has grown up in the recruiting of contract 
labor from beyond the boundaries of the colony. 
In order to preserve their own labor supply, many 
colonies have forbidden the exportation of labor- 
ers except under special conditions. In the Ger- 
man colonies the explicit consent of the imperial 
commissioner is necessary. In the Congo Free 
State and in the French colonies of West Africa, 
the recruiting of native laborers requires a special 
permit of the government, and if they are to be 
exported from the colony this license is granted 
only temporarily. In the Ivory Coast Colony a 
tax of 25 francs per head is levied upon each 
laborer exported and the government of French 
Congo has established the high passport rate of 
100 francs. In Lagos no native labor is to be 
engaged for service outside of British dominions 
without the express sanction of the Secretary of 
State for the colonies and the chief of the district. 
In Northern Nigeria the consent of the High 
Commissioner is required. 

The principal sources of contract labor supply 
have thus far been India and China. Although 
the natives of India do not compare in physique 
with the people of many other tropical colonies, 
they have been trained to continuous labor and 
are therefore in great demand where steady work 
is required. When slavery was abolished in the 



English and French tropical colonies, the freed- 
men showed little desire to continue work on the 
plantations ; consequently the system of import- 
ing labor from India was resorted to, and it has 
been in use ever since. It has also been intro- 
duced into parts of Africa, in localities where the 
native population is unwilling to do continuous 
work. On the whole, the system has resulted in 
the greater productivity of the colonies in which 
it is used ; at least when they are compared with 
other colonies with respect to production for 
export, they make a far better showing. Al- 
though the wages of the Hindu coolies are low 
(25 to 50 cents a day), they manage to save a 
large part of their earnings, and upon returning 
to India, they bring with them considerable quan- 
tities of silver in coins, ornaments, and specie. 1 
In their new surroundings the Hindu coolies 
keep up their customs and their outward mode 
of living; the caste system is preserved, and 
though they work with the negroes, they do not 
have any social relations with them. 

The recruiting of coolies is carried on under 
the special supervision of the Indian government. 
Emigration is permitted only from the ports of 
Calcutta, Madras, Bombay, and such others as 
may be specially designated. The following col- 
onies are entitled to obtain coolies from India: 
Mauritius, Jamaica, British Guiana, Trinidad, 
Natal, Fiji, Dutch Guiana, South Africa, and sev- 

l Thus, for instance, in 1900, 1,145 laborers returning from 
British Guiana brought with them 150,000 rupees. 
24 369 


eral small West Indian islands. Indian coolie 
laborers were also used by the British govern- 
ment in the construction of the Uganda railroad 
in East Africa; over 20,000 East Indians were 
employed, as the local natives could not be relied 
upon as workmen. Formerly the French colo- 
nies of Reunion, French Guiana, and the Antilles 
also received contract laborers from India, but as 
they failed to live up to the conditions laid down 
by the Indian government, with respect to the 
care of the contract laborers, the privilege was 

The colonies receiving Indian coolies are 
required to have agents of immigration, who act 
as protectors of the immigrants. They distribute 
the laborers among the various employers, and 
look after their interests during their stay in the 
colony. The powers of an agent of immigration, 
as defined by the law of 1891, are as follows: He 
is empowered at any time to enter the plantations 
in order to inspect their general condition and to 
investigate into the treatment of the contract 
laborers. He is to hear complaints and lay infor- 
mation against employers before the magistrate 
of the district. It is his duty to act as adviser of 
the laborers in case an action comes to trial. 
Under the provisions of the Consolidated Immi- 
gration Ordinance of 1864, the employers are 
required to furnish suitable dwelling houses and 
hospital accommodations for the laborers, as well 
as medical attendance in case of sickness. The 
wages must not fall below the scale paid to non- 


indentured laborers and no deduction is to be 
made for any of the accommodations required by 
the law. The laborers are required to work five 
days per week; the work-day lasts seven hours 
when the men are employed in the fields, and ten 
hours in the factories. After serving five years 
under a contract, and afterwards remaining five 
years longer in the colony, the laborer is entitled 
to free passage back to India. This legislation 
so carefully safeguards the rights of the laborers, 
and the British officials in the colonies where the 
system has been used have on the whole been so 
efficient in their enforcement of its provisions, 
that fair dealing and good treatment has in most 
cases been assured to the contract laborers. 
Nevertheless, as we shall see later, the system in 
general cannot be considered an unqualified suc- 
cess. The exportation of Chinese coolies is by 
treaty made subject to the supervision of the 
consular officers of the various powers in China. 
Moreover, the individual colonies in which this 
labor is used in all cases provide a protective ser- 
vice for the Chinese. The system has been used 
chiefly in the Straits Settlements, in Sumatra, in 
British Guiana, and lately in South Africa. 
Through the immigration of Chinese, the popu- 
lation of the Straits Settlements and of the Fed- 
erated Malay States is rapidly changing in its 
character, and the Chinese are fast becoming the 
preponderating element. They are ready to do 
the hard work upon the plantations and in the 
mines, and in frugality and industry they are far 



superior to the native population. For the super- 
vision of this contract labor the government has 
established a protectorate of the Chinese immi- 
grants. The laborers are brought in by brokers 
and are detained in a compound until they have 
been hired out to contractors. By law the con- 
tract is limited to two years. If a coolie tries to 
abscond he may be arrested and the fine imposed 
must be worked out by him. The treatment of 
the laborers and the performance of the contract 
regulations are strictly supervised by the govern- 
ment officials. 

In East Sumatra a large number of Chinese 
contract coolies are employed, 1 many of whom 
are held in permanent debt bondage. Gambling 
among the Chinese laborers is encouraged by the 
employers, as it keeps the coolies in constant 
need of money and enables the employer to main- 
tain his hold upon them. They are subject, under 
the "Coolie Ordinance," to the almost unlimited 
power of the employer, which is often exercised 
in a cruel and inhuman manner. In the German 
colony of Samoa, Chinese laborers may be im- 
ported with permission of the government. They 
are not, however, allowed to acquire land or to 
engage in commerce, except upon special permis- 
sion, which is rarely granted. In Madagascar 
a decree of 1903 makes complete regulations con- 
cerning labor contracts, the rights of immigrants 
to their return home, and their special delicts. 
Imported contract labor was used for a long time 

1 In 1900 the number was 36,500. 


in the sugar industry of Hawaii, but it was abol- 
ished after the annexation of the islands to the 
United States. 1 

After much bitter discussion the British gov- 
ernment in 1903 finally permitted the importation 
of Chinese contract labor to be used in the Trans- 
vaal mines. The ordinance surrounds the impor- 
tation and the contract with the usual safeguards, 
it fixes the contract period at three years, it does 
not limit the numbers to be imported, and it pro- 
vides that the Chinese are to be used only for 
unskilled labor. The exploitation of the Trans- 
vaal mines has received a great impetus through 
the presence of an abundant and steady labor 
supply, but the political expediency of the meas- 
ure is still more than doubtful. For though 
skilled employments are in terms reserved to 
whites, it will manifestly be very difficult to draw 
a definite line between the two kinds of labor and 
it is likely that the Chinese will gradually en- 
croach more and more on the white employees. 
The political aim, announced by the government 
at the end of the war, of introducing enough Eng- 
lish settlers to counterbalance the Dutch is there- 
fore not visibly advanced by this legislation. 
Moreover, should there be a sufficient labor sup- 
ply to operate all the mines simultaneously, 
though there would then be work enough for 
large numbers of white artisans, the probabilities 
are that within a generation the mines would be 

x The governor of Hawaii in 1905 proposed a partial return 
to the system. 



exhausted and the English white population 
would suddenly lose its means of livelihood, not 
having had the necessary time for developing a 
general economic life in the colony. Though the 
ordinance provides that Chinese coolies shall not 
engage in trade, or hold land, or perform skilled 
labor, it cannot prevent the coming of independ- 
ent Chinese merchants and workmen in the train 
of the contract coolies. Only a general Chinese 
exclusion act, which the British government for 
international reasons does not desire to pass, 
could prevent a steady stream of independent 
Chinese immigration from being started. In 
order to avoid lasting harm from the introduction 
of Asiatic labor, both to white settlement and to 
the development of the negro race, the movement 
will have to be closely controlled, and so regu- 
lated that as the supply of Kaffir labor becomes 
more abundant the importation of coolies shall 
be proportionately reduced. 

In general it may be said that though the 
administrative control of imported contract labor 
in the British colonies has been very careful and 
efficient, the system has a number of very grave 
defects. The importation of coolies constitutes 
a serious discouragement to the immigration of 
free labor. It is therefore inadvisable in coun- 
tries which can be peopled by European working- 
men, as it is impossible for the latter to compete 
with the cheap Oriental labor supply, and as they 
are consequently kept from the regions invaded 
by it. The moral effects of the system, too, are 



undesirable. A large body of male adults, taken 
away from their home surroundings, are placed 
for a time in an entirely strange country, in 
which usually they are not permanently to make 
their home. They are under artificial regulations 
and live under the conditions of an encampment. 
It is not surprising that they are prone to vice of 
all sorts, and that their influence upon the lower 
classes of the local population is not good. From 
the economic point of view the system has been 
criticised as being too expensive because it 
requires the transportation of laborers for long 
distances and also necessitates a complicated sys- 
tem of supervision. The laborers have no special 
incentive to do good work they have no interest 
in the country or its industries, nor any but the 
slightest contact with their employers. The sys- 
tem has therefore not always been found eco- 
nomically profitable. Nevertheless, its tempo- 
rary use will in certain cases be advisable in col- 
onies with very large natural resources, which the 
native population cannot be induced to develop. 
It is, however, not a system that commends itself 
as a normal and final method of solving the labor 
question in the tropics, and it certainly calls for 
the strictest safeguards for the protection both of 
the contract laborers and the local native popula- 
tion. The question of contract labor must not be 
confused with that of the immigration of inde- 
pendent Chinese workmen, which brings up con- 
siderations of a different order. 

It is interesting to note how great an extension 


of state functions is implied in labor contract 
supervision. The state determines whether con- 
tract laborers are to be imported at all, and 
exercises a strict control over the methods of 
importation. It fixes the contents of the labor 
contract, and supervises the execution of its pro- 
visions and the general treatment of the laborers. 
Breaches of contract on the part of the laborer 
it visits with punishments ordinarily reserved for 
crimes against the state. In a word, the whole 
matter of labor contracts is treated as a part of 
public law. 

Forced Labor. From the employment of con- 
tract labor to the use of direct force for compel- 
ling industry on the part of the natives would 
seem to be a long step, yet this policy is neither 
without advocates nor without precedents even 
in European colonies. Most all the populations 
with whom the European nations are coming into 
contact were formerly accustomed to some man- 
ner of forced labor without remuneration, but it 
was one of the boasts of the European powers 
that they would abolish slavery and forced labor 
of every kind. This promise has been partly 
made good an honest war has been waged 
against the slave trade in Africa, and the corvte 
has been done away with in most colonies. Thus 
it has been abolished by Great Britain in Egypt, 
by France in Algeria, and by Holland its com- 
mutatioh has been begun in Java and Madura. 
But while abolished in their old form, slavery and 
the corvee are constantly pushing their way again 



into colonial administration under new and less 
suspicious guises. 

The colonial administration in Tongking first 
tried Chinese coolies in railway construction 
work, but as they found them a disobedient, rob- 
bing horde, they had recourse to forced labor 
recruited among the Annamites. This resulted 
in a great loss of human life on account of the 
insalubrity of the region, and consequently forced 
labor was avowedly abolished. But at the pres- 
ent time, for works of general interest, the vil- 
lages are obliged to furnish coolies at a rate of 
ten cents per day. As the money is paid to the 
villages and not to the laborers, the corvee for 
public purposes has thus, in substance, main- 
tained itself. In Madagascar, General Gallieni in 
1899 established a corvee for the building of roads 
and railways. In order to assist the French set- 
tlers in securing a labor supply he further ordered 
that those natives who were under an engage- 
ment to work for colonists were to be excused 
from the corvee services. As it was impossible 
to prevent defrauding of the government under 
this system a change was made in 1901, and the 
use of labor contracts with a penal sanction was 

In the Dutch East Indies a most extensive use 
of corvee services was made under the culture sys- 
tem. Together with the abolition of this system 
and the restriction of the use of forced labor on 
the government coffee plantations, the govern- 
ment established the policy of gradually commu- 



ting the various remaining customary dues to 
money payment. By a law of 1882 the services 
due to the native chiefs above the rank of village 
headman were abolished, and in their place a 
head tax of one florin was imposed, out of which 
the chiefs were to be remunerated. The surplus 
realized was to be used for a further commutation 
of the labor dues. This has not, however, pro- 
gressed very rapidly and the government still 
exacts services for periods varying from 12 to 42 
days per year in the different districts. The 
natives are obliged to assist without pay in the 
building and maintenance of roads, dams, water- 
works, bridges, and dikes, in doing duty as watch- 
men, and in constructing irrigation works. 
These services are in the nature of a tax, being 
performed for a public purpose. 

In the African tropical colonies labor services 
are often obtained by control exercised through 
the chiefs. In the German colonies the natives 
are in this manner obliged to perform works of 
public utility, and in general they are not unwil- 
ling, especially when the work is seen to result in 
direct benefit to their particular village or district. 
In Kamerun the natives have even been taught to 
build and maintain roads with very little Euro- 
pean control and supervision. They have come 
to realize the importance of good communica- 
tions, and under the leadership of their chiefs, are 
keeping up the work without much urging from 
the European authorities. The system of obtain- 
ing labor through the chiefs is also used most sue- 



cessfully in the French West African colonies, 
especially in Senegal and Dahomey. In these 
colonies, the natives are paid a fair remuneration 
for their work, which is not always strictly of a 
public nature. In Dahomey the embankment of 
the railway was built entirely by labor thus 
secured. Pressure was brought to bear upon the 
chiefs, who secured large numbers of native 
laborers; the latter were honestly and regularly 
paid, and no dissatisfaction resulted. 

The system of the corvee is exceedingly repre- 
hensible when employed for the advantage of 
purely private undertakings. In Matabeleland, 
according to the report of a special commissioner, 
the young men of the Avagansi (the higher class 
of natives) were called upon to work for Euro- 
peans two months in the year. This they refused 
to do, because they claimed that their serfs were 
already working in their behalf. But the 
mounted police were used to "round them up" 
and to bring them before the native commis- 
sioner, who distributed them among European 
employers. The officials of the British South 
Africa Company refused to admit that forced 
labor existed in their territories, but this is a mere 
question of words as it cannot be denied that the 
system described above was used for some time. 
As a result the natives came to believe that all 
their rights had been taken from them, and they 
sought refuge in revolt. 

The system of forced labor has assumed its 
most outrageous form in the Congo Free State. 



Not only are the natives here forced to work for 
the government and its favored companies in 
gathering the products of the forest for a mere 
nominal remuneration, but a large number of 
able bodied men are reduced to the condition of 
practical slavery in the so-called public force. 
This body, which is officially reported to consist 
of 15,000 men, but which according to the opinion 
of travelers and explorers is far larger, is used 
almost entirely for industrial purposes. The 
"soldiers" hold the native villagers to a strict per- 
formance of the services imposed upon them by 
the government, and they are themselves con- 
strained to labor a large part of the time as car- 
riers, in the construction of public works, and in 
gathering the forest products. By the natives, 
enrollment in the army is looked upon as no bet- 
ter than slavery; and the manner in which the 
force publique is employed in heavy porterage and 
other work which was formerly done by the 
slaves, leaves but little doubt that this population 
is actually being enslaved under the fair name of 
liberation, for the benefit of the government and 
its privileged companies. 

In Portuguese West Africa the corvee was 
originally introduced for the purpose of the con- 
struction of public works. With the assistance 
of the authority of the chieftains, natives were 
enlisted, and a nominal pay was allowed for their 
services. But soon the government permitted 
these native labor forces to be leased out to pri- 
vate individuals and corporations under the forms 



of the penal contract system. The result has 
been a general recrudescence of slavery. The 
natives thus drafted into service are used to do 
the work of carriers for long distances and to toil 
upon the plantations, without any reasonable 
hope of ever having their liberty again. 

Slavery. Meanwhile the struggle against sla- 
very is being continued by the European powers. 
The strictest repression of the slave trade is 
indeed necessary from every point of view, as this 
cruel traffic leads to the worst kind of suffering 
on the part of the natives. But the institution of 
domestic slavery must be abolished somewhat 
more gradually, as its immediate destruction 
would result in the greatest disorder and in the 
unsettling of all native social relations. More- 
over, as we have seen in the case of Zanzibar, 1 the 
native serfs are generally not anxious to leave 
the employment of their masters, and are helpless 
if suddenly freed. Colonial legislation in general 
either does not recognize the institution of do- 
mestic serfdom or tries to prepare the way for its 
abolition. A law in Togo (1902) provides that 
the children of house slaves born after the proc- 
lamation of the respective act shall be declared 
free. It prohibits self-sale and the transfer of 
slaves, and it does not admit serfdom for debt. 
Slaves of undutiful and cruel masters are to be 
freed and all abuses of the relation are strictly 
repressed. Slave traders are punished with life 
imprisonment and in serious cases with death. 
1 See page 66. 



In Nigeria serfdom was abolished in form, but 
the authority of the head of the household is rec- 
ognized by a later ordinance (1901). 

From what has gone before, it will be seen that 
while with a blare of trumpets they announce the 
abolition of the native institutions of serfdom, 
which are in many cases mild and do not involve 
great suffering on the part of the serf, some Euro- 
pean colonial governments are introducing sys- 
tems of forced labor which actually result in far 
greater hardship than domestic serfdom consid- 
ered by itself. Of course it would be difficult to 
imagine that any system introduced by the Euro- 
pean powers could equal the abominations of 
Arab slave raiding, but there is some danger that 
the new methods of forced labor may be far more 
disadvantageous to the natives than was the 
rather mild form of domestic serfdom as it exists 
in many parts of Africa. That serfdom will be 
effectually transformed by legislative enactments 
and by the growing economic development of 
Africa may be expected with confidence, but the 
plainest justice demands that in its place there 
shall not be erected under the sanction of Euro- 
pean legislation a system far more disastrous in 
its consequences upon the natives. 

The impression is abroad that the natives of 
Africa are disinclined to work and that some rig- 
orous artificial means must be contrived for ren- 
dering them industrious. Blunt individuals 
speak of them as "lazy, worthless brutes," while 
Statesmen phrase their ideas in more considerate 



language. In a speech in the House of Com- 
mons of May 7, 1898, Mr. Joseph Chamberlain 
said: "The corvee existing in Matabeleland was 
of this nature that the natives against their will 
were practically compelled to give a certain time 
of the year to ordirfary industrial labor. It was 
not the whole of their time, but I think that it was 
for three months in the year that the native chiefs 
had to furnish a certain proportion of labor for 

the mines When you say to a savage people, 

who have hitherto found their chief employment, 
occupation and profit in war, 'You shall no longer 
go to war, tribal war is forbidden/ you have to 
bring about some means by which they may earn 
their living in place of it, and you have to induce 
them, sooner or later, to adopt the ordinary meth- 
ods of earning a livelihood by the sweat of their 
brow. But with a race of this kind, I doubt very 
much if you can do it merely by preaching. I 
think that something in the nature of inducement, 
stimulus or pressure is absolutely necessary if you 
are to secure a result which is desirable in the 
interests of humanity and civilization." 1 

*A most delicious example of unconscious irony may be 
found in an article of the Rev. C. Usher Wilson on "The Na- 
tive Question and Irrigation in South Africa" in the Fort- 
nightly for August, 1903. The reverend gentleman advocates 
a system of native labor conscription among young men. He 
says in substance : "A careful study of educated natives has 
almost persuaded me that secular education is not a progres- 
sive factor in social evolution. The salvation of a primitive 
people depends upon the force of Christianity alone, special 
attention being paid to its all-important rule, 'Six days shalt 
thou labor. 1 .... In the education of the world it ever 
been true that slavery has been a necessary step in the social 

progress of primitive peoples In the corrugated iron 



Character of Africans. The opinion contained 
in expressions such as this in which all the vari- 
ous races of Africa are indiscriminately dismissed 
as worthless, is very crude and is entirely unjust 
to many of the native tribes of Africa. It is true 
that in certain parts of Africa the natives are 
shiftless, deceitful, and apparently unwilling to 
learn the industrial arts. But it is significant 
that this is true chiefly of those regions where all 
morality has been destroyed through the reign 
of terror of Arab slave raiding, or where the sys- 
tem of slavery was introduced by European set- 
tlers themselves in the earlier periods of coloniza- 
tion. In other parts, populations are found 
which according to the testimony of all compe- 
tent witnesses are highly industrious and have a 
decided capacity for economic development. 
Among the races of West Africa many are en- 
dowed with excellent qualities. The Baudas and 
Wolofs of Senegal are industrious workmen, the 
Fulani or Fulbe show great ability in the raising 
of herds of cattle, the Mandingos of Gambia and 
the Toucouleurs of the Upper Niger excel as 
agriculturists. The Krumen have made them- 

barracks of the conscribed labor forces, through all the five 
senses the tenets of civilization will be enforced. 1 ' In these 
same corrugated barracks the natives are to be educated to a 
taste for the lentils which will be produced on the irrigation 
company's lands. He proceeds : "The Kaffirs had no cen- 
turies of slavery to teach them passive submission, yet the 
obligations which we owe the Kaffir will not permit us with 
honor to ourselves to thrust him aside as an unpromising 
pupil." With noble breadth of view he contemplates the 
"coming salvation of millions of fellow beings." Long live 
the corrugated civilization ! 



selves indispensable on the whole West Coast as 
laborers and artisans, and the Hausas have evoked 
the admiration of all observers through their high 
qualities of energy, discipline, and intelligence. 
In the Gold Coast colony it was believed at first 
that the natives could not be induced to work 
they were timid and avoided all contact with 
white men; but by treating them properly their 
confidence was gained, and now as many natives 
as are needed may be had for work. The 
Ashantis are very reliable workmen and have 
given great satisfaction as station masters and 
mechanics upon the Lagos Railway. In some 
parts of Africa, such as the Congo region, labor 
is on the whole scarce and inefficient. In the 
French Congo good skilled labor has to be 
brought from Senegal and Acra, and is paid very 
liberally, wages being as high as 175 francs per 
month. But in these regions Arab slave raiding 
has destroyed all civilization, and it is not a mat- 
ter of surprise that the natives who are left are 
timid and unwilling to be drawn into relations 
with strangers. 

When we consider the extent of the natural 
labor supply in Africa, it would seem that, if only 
the natural forces were allowed peaceably to 
assert themselves, every reasonable demand for 
labor would soon be satisfied. What Africa 
needs is justice and peace, in order that the popu- 
lations may at last settle down to a social life that 
is not constantly interrupted by bloody warfare 
and murderous raids. If this settled condition 
25 385 


is once established, population pressure alone will 
induce even those tribes who are most indolent, 
to make themselves useful. Thus far the African 
natives have not received much rational treat- 
ment. After being for a long time hounded by 
the Arabs, they even now, under European 
authority, fall into the hands of men who treat 
them as beasts of burden. Employment as car- 
riers takes them hundreds of miles from their 
homes and as a return for their pains they are 
often paid in worthless trash. It has usually 
been found that wherever they are treated ration- 
ally and in a humane way, wherever they are 
promptly paid, wherever they see that labor bene- 
fits themselves and their villages, the natives of 
West Africa have shown themselves willing to 
work. As they are primarily agriculturists, they 
are anxious to return to their holdings in seed 
time and harvest season. They are therefore not 
ready to make engagements for a long period. 
But this of itself certainly redounds to their credit 
they do not wish to neglect their home interests 
in order to earn a little more money in a strange 
country. The introduction of agricultural imple- 
ments is having a very marked effect upon the 
habits of some of the South African tribes. The 
greatest abuse among many of them was that the 
work of cultivation was shouldered upon the 
women; generally the men take care of the cattle 
while the women do the farm work. But when 
the use of ploughs is introduced, the men begin 
to till the soil, because this work involves the 



management of draft animals, which is properly 
a masculine occupation. Industrial education, 
too, is already doing something to develop in the 
native African, technical ability and a greater 
love for work. 

It is but natural that where the natives' self- 
interest can be enlisted, far better results will be 
obtained than from an attempt to force their 
efforts. In Hawaii, after contract labor had been 
abolished, the so-called purchase system was 
instituted. A company of laborers are given a 
lease of land; the planter furnishes them with 
seed, tools, and in fact with everything that they 
need for cultivation. The workmen till their 
fields and are paid according to the product 
yielded. The contract association is really a 
guild of laborers working together in a commu- 
nistic fashion, and sharing the proceeds of their 
toil. It has been found that the men take the 
greatest care of their holdings, that they con- 
struct abundant works of irrigation, and that they 
are anxious to supply the soil with fertilizers in 
order that the product may be increased. The 
metayer system of Indo-China is based on a sim- 
ilar principle. The colonist hires native peasants 
to come upon his land and cultivate it; he sup- 
plies them with beasts of burden, seed, and imple- 
ments, and the product is shared in equal parts 
between the landlord and his workmen. 

When we consider the systems of forced labor 
in their general aspects many considerations sug- 
gest themselves which are entirely unfavorable 



to these methods. The use of force renders all 
labor a degrading occupation. What the serf 
and the slave are doing the freedman will avoid as 
long as he can. The system can therefore not be 
used as a means of educating men to a love of 
work. The argument is often made that every 
people must pass through a long course of train- 
ing in which its ability to use its powers is devel- 
oped and the habit of regular work is established. 
It is urged that slavery and serfdom was a school 
of this kind for the Western nations. The fal- 
lacy of this argument is apparent when we con- 
sider the effect of slavery upon the negro race in 
America. Upon emancipation the negroes were 
by no means fitted for self-support. They were 
not anxious to work; their whole desire was to 
avoid degrading toil and to live a life of ease, such 
as they had seen the gentlemen, their masters, 
enjoying. After their long schooling, they were 
ready to enjoy a perpetual vacation. Considered 
purely in its economic effect, a system of forced 
labor is exceedingly wasteful. Even under the 
most favorable conditions, as in the culture sys- 
tem of Java, a great amount of waste is incurred. 
The culture system was profitable to the govern- 
ment only because it took from the natives more 
than they could afford to give. Forced labor is 
wasteful because it necessitates constant govern- 
mental supervision, but most of all because it 
places the interest of the laborer directly in oppo- 
sition to that of the employer. To do as little as 
possible and to shirk his tasks becomes the prin- 



cipal aim of the laborer, and it takes far more 
energy and eventually far more money to wring 
the work out of unwilling men, than it would 
require to build up industry on* a free labor basis. 
The African race is usually looked upon as sav- 
age and child-like, but it is well known to the 
observers of actual conditions, that the African 
has a highly developed sense of justice and that 
he is filled with bitter resentment when his rights 
are invaded. Although he may not be able to 
make himself heard in the forum of the world, and 
the injustice which makes him writhe is allowed 
to go unpunished, an economic system which 
rests upon his dispossession and his enslavement 
to those who have robbed him of his land, is not 
a proper foundation for lasting success in African 
colonial development. With the increasing mo- 
bility of social forces in Africa, the industrious 
races will naturally displace those who are worth- 
less. Hindu laborers are coming in large num- 
bers to the east coast, and the energetic and effect- 
ive races of the West, such as the Hausas and the 
Fulani, will form a leaven for the economic 
regeneration of tropical Africa. It may well be 
considered whether it is not the better counsel to 
trust to the working of natural forces and to the 
encouragement of efficient native races, rather 
than to a policy which would stamp the entire 
population of Africa as savage and worthless, to 
be driven to work by blows and to be denied 
plain justice. 





Moral and Material Progress and Condition of India, 
1901-1902. Ch. 14. JOHNSTON, H. H., Uganda Protectorate 
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Die Deutsche Kolonialgesetzgebung. Part II, 194, 318. 
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Bibl. Col. Int. Serie I. La main-d'oeuvre aux colonies. 
Bruxelles, 1895-97. 


BARTH, H., Travels and Discoveries in North and Central 
Africa. Ch. 25, 27, 34. BERG, N. P. VAN DEN, Verhouding 
tusschen Werkgevers en Arbeiders in Nederl.-Indie. Am- 
sterdam, 1890. BRAND, J. v. D., De Practijk der Koelie 
Ordonantie. Amsterdam, 1904. BRUNEL, L., L'fitat et Tin- 
dividu dans les colonies franchises modernes. Paris, 1898. 
Ch. 6. CAILLEUX, ED., La question chinoise aux tats Unis 
et dans les possessions des puissances europeennes. Paris, 
1898. COMAN, K., The History of Contract Labor in the 
Hawaiian Islands. New York, 1903. Congres Interna- 
tional de sociologie coloniale. 1900. Pp. 125, 325. DAY, 
CLIVE, The Dutch in Java. Chs. 8, 9, 10. EGERTON, H. E., 
Origin and Growth of Brit. Col. Oxf. 1903. Ch. 7. Fox 
BOURNE, H. R., Civilization in Congoland. London, 1903. 
Ch. 10. Inst. Col. Int. Compte rendu, 1895. 103. IRE- 
LAND, A., Tropical Colonization. Ch. 4-6. KELLER, A. S., 
"Colonial Policy of the Germans." Yale Review, May, 1902. 
KINGSLEY, MARY H., West African Studies. KIRKE, H., 
"Effects of Colonization in British Guiana." Econ. Rev., 
Oct., 1901. LEO, "Die Arbeiterfrage in unseren afrikan- 
ischen Kolonien." B. z. K. Part IV, 31 LEROY-BEAULIEU, 
P., La colonisation chez lez peuples modernes. 5th ed. II, 
594. LITH, P. A., VAN DER, Encyclopaedic van Nederl.- 
Indie. Articles: "Heerendiensten," "Koelie Ordonantie." 



MARKHAM, V. R., The New Era in South Africa. London, 
1904. MOCKLER-FERRYMAN, A. R, British Nigeria. 239. 
MOREL, E. D., Affairs in West Africa. Ch. 31. NAHAS, 
J. R, Situation du fellah egyptien. Paris, 1901. OLOFF, R, 
"Die Arbeiterfrage in den Kolonien." B. 2 .K. IV, 365. 
PETIT, M., Les colonies frangaises. passim. PILGRIM, C, 
Problemes Sud-Africaines. La main-d'oeuvre. R. P. et P. 
37 : 528. PREVILLE, A. DE, Les societes africaines. ROBIN, 
R., La question de la main-d'oeuvre dans les colonies. 
Paris, 1899. ROBINSON, Nigeria. SCHOCH, C. T., De Heer- 
endiensten op Java en Madoera. SCHWEINFURTH, The 
Heart of Africa. South African Native Races Committee. 
The Natives of South Africa. London, 1901. Ch. 6-8. 
THOMSON, H. C, Rhodesia and its Government. Ch. 18. 
TOUTEE, Du Dahome au Sahara. WAUTERS, A, J., L'fitat 
Independant du Congo. Ch. 23. WEYL, W. E., "The Labor 
Situation in Mexico." Ann. Am. Ac. 21 : 77. 




The external defense of the colonies depends 
primarily upon the navy, and its consideration 
belongs rather to national politics than to the 
subject of colonial administration. The naval 
system of a great empire is a unit no matter how 
far its influence may extend and how ramified 
may be the routes over which it attempts to exer- 
cise control; therefore as long as colonies retain 
their position of dependence their naval defense 
must be primarily in the hands of the mother 
country and controlled by a central admiralty. 

In this chapter we are more directly interested 
in the colonial army as the instrument of defense 
which comes into immediate contact with the 
organs of colonial administration. The functions 
of the colonial army are of a threefold character. 
Its purpose is to defend colonial possessions 
against attacks from without, to preserve internal 
order by suppressing rebellions among the 
natives, and to assist in the development of the 
colony in times of peace by engaging in the con- 
struction of public works. In order to maintain 
the highest degree of military efficiency it is nec- 
essary that the morale and physique of the men 



in the colonial service should constantly be kept 
in the best condition through a system of com- 
bining warlike exercises with regular work in 
connection with the economic undertakings of 
the government. 

The second purpose of the colonial army is 
one that calls for the greatest tact and circum- 
spection, especially in countries newly subju- 
gated. It is a much-mooted question how far 
native troops can be used effectively in the work 
of original pacification. The two most famous 
colonial conquests, that of Gaul by Caesar and of 
India by the British, were carried on with the 
assistance of large native contingents. The 
French, on the other hand, have used chiefly 
European troops in the work of conquest. It is 
undoubtedly a great advantage if opposing forces 
in the native states can be so manipulated as to 
work out the firm establishment of orderly gov- 
ernment without too constant reliance upon an 
army of Europeans; but in the use of native 
auxiliaries it is very easy to fall into grave mis- 
takes. From a military point of view it may be 
advisable to employ exceedingly fierce and bar- 
barous native contingents for the purpose of 
rapid conquest, but if such tribes have already 
made themselves thoroughly well hated by the 
population to be subjugated, their use, entirely 
aside from the cruelty which it involves, is of 
decidedly doubtful wisdom, politically considered. 

The functions of colonial troops differ from 
those of a European army especially in the use 



made of the former for general economic works 
of civilization. Both France and Germany (as 
well as Russia in her Asiatic possessions) are 
employing military forces for the construction 
of public works. By thus allying the military 
with the economic interests of the colony they 
gain a double purpose. The soldiery is kept busy 
at all times, the indolent degeneracy so easily 
brought on in tropical climates is prevented, and 
the public works of which a new colony is so 
much in need are constructed at a greatly reduced 
expense. In the tropics this regime is applied 
chiefly to the native troops ; while the European 
soldiers take their recourse to exercise in athletic 
sports, in order to withstand the influence of the 

Various important considerations call for the 
separate organization of colonial and national 
troops. In the first place, it is not desirable that 
national army officers should receive their practi- 
cal training primarily in colonial warfare. For, 
if the colonial service is not distinguished from 
the national army, officers who have won their 
spurs in the former will advance more rapidly on 
account of the greater opportunities for distinc- 
tion offered by colonial warfare ; they will there- 
fore outrank the officers who stay at home and 
will arrive more easily at the supreme command. 
The evil results of such a situation were shown 
in the Franco-Prussian war, in which many of the 
mistakes on the French side could be traced to 
the fact that the French officers had gained their 



experience in Algerian campaigns. They quite 
naturally used their habitual tactics when they 
met the German army, without considering that 
this contingency required principles of warfare 
entirely different from those to which they were 
accustomed. Another ground for the separation 
of the two branches of the army, is that European 
troops always suffer great losses when engaged 
in service in the tropics. They have to acclima- 
tize themselves and must practically change their 
constitution before they can become an efficient 
fighting body in a tropical country. A consider- 
ation of the colonial armies of the various great 
powers will more fully illustrate these general 

British Colonial Army. The most important 
part of the British military system, the army of 
India, is divided into two parts, the British army 
and the native troops. Since the great Sepoy 
Mutiny the practice has been to maintain the 
ratio of European to native soldiers at i :2, and to 
man the artillery chiefly with Europeans. 1 The 
British army in India is composed of Europeans 
recruited in Great Britain and detailed for service 
in India for twelve year periods. 2 The native 
army is organized separately, being recruited in 
India, chiefly from among the Sikhs, Gurkhas, 
and Rajputs. A garrison always embraces both 

*A similar ratio of European to native troops (2:3) is ob- 
served in the military organization of the Dutch East Indies, 
where all commissioned officers are Europeans. 

*At present it counts 74,600 officers and men. 


British and native battalions. 1 In order to utilize 
the military spirit among the natives, there was 
organized in 1888 a force called Imperial Service 
Troops. These are under the command of the 
native rulers, though the military instruction is 
given by British officers. The entire number of 
Imperial Service Troops is about 19,000. Indian 
troops have frequently been used in warfare 
beyond the confines of the Indian Empire. Thus 
in 1900, six regiments of British Indian troops 
and twenty-one native regiments were used out- 
side of India on account of the South African and 
the Chinese wars. The number of troops sent by 
India to take part in the Chinese war was alto- 
gether 15,200, in addition to the battalions acting 
as a garrison in Hongkong. Considering this 
use of Indian troops the request brought forward 
of late that Great Britain should pay a part of 
the Indian military expenditure, does not seem 
In Africa the British have made considerable 

x lhe native army is officered chiefly by Europeans. In the 
Indian army care is taken to differentiate between classes, to 
make use of special aptitudes, to foster priae of race and 
esprit de corps in order to increase the military efficiency of 
the individual units of the fighting strength. By concentrating 
certain tribes in certain regiments, race pride and feeling is 
fostered and enlistment made more popular. Sikhism, now 
almost entirely a military religion, a as by the assistance of 
British efforts been revived and extended in order to broaden 
the recruiting grounds of the army. Particular attention is 
now being paid to tne strengthening of the reserve, the im- 
proving of the condition of the native soldier, the increasing 
of the field from which raw material for the army is drawn, 
and the efficient military training of the tribes on the vulner- 
able Northwest frontier. 



use of native troops. The military organization 
in the West Coast colonies, the West Africa 
Frontier Force, comprises both British and native 
battalions. The permanent strength of the Force 
is about 8,000, and the troops are divided among 
the various colonies, the largest number being 
stationed in Nigeria. The most reliable native 
soldiers in West Africa are the Hausas, whose 
military traditions, splendid physique, and habits 
of discipline would render them desirable mili- 
tary material anywhere. The Rhodesian police, 
which is really a small army, being organized 
upon a military basis though entirely subject to 
the civil administration, is an exceedingly inter- 
esting body. It is recruited largely from young 
British gentlemen who seek their fortune in 
South Africa and begin their work in this rather 
humble though adventuresome fashion. The 
Rhodesian police has done an exceedingly diffi- 
cult and important work. In the pacification of 
Mashonaland one-half of the entire force was lost 
in a single year, but military activity went on 
uninterruptedly until the final suppression of the 
native uprisings. 

The Egyptian army has been brought to a high 
degree of efficiency under the British command- 
ers who have been in charge since 1882. The 
army comprises about 16,000 soldiers, recruited 
by selected conscription among the fellaheqn of 
Egypt and by voluntary enlistment among the 
Sudanese. Four of the infantry battalions and 
one-half of the cavalry squadrons are commanded 



by Egyptian officers. All the higher commands 
are, however, filled by British officers, who must 
be able to speak Arabic and who are thoroughly 
familiar with the local conditions and with the 
character of the native soldiery. The efficiency 
of the Egyptian army was demonstrated under 
Lord Kitchener in the Sudanese campaign, when 
the most difficult and trying military operations 
were executed without fear by a race who twenty 
years ago were looked upon as arrant cowards. 

The French Colonial Army. After extended 
discussion and after the passage of several partial 
legislative measures, such as the laws of 1889 an( i 
1893, the French colonial army has finally been 
given a fairly definite constitution by the law of 
July 7, 1900. The principal point of controversy 
in the Chambers, when this law was under consid- 
eration, was whether the colonial army should be 
attached to the department of the marine, or of 
war, or of colonies. Considering the specific 
character of the colonial army it was urged that it 
could fulfill its purpose only if it were placed 
under the charge of the colonial department and 
if the governors in the individual colonies, as 
heads of the civil as well as of the military admin- 
istration, were made responsible for the defense 
of the colonies in times of war. But the opposite 
point of view prevailed in the French Parliament. 
The deputies feared that by giving the colonial 
department control of an army they would be 
establishing a third ministry of war and arrang- 
ing the forces of the empire in such a manner that 



they could not be used effectively under a con- 
centrated plan. They therefore placed the colo- 
nial army under the ministry of war, and enacted 
that while it existed primarily for the defense of 
the colonies it might also be used to protect the 
mother country, or in military operations outside 
of French territory. A concession was however 
made to the opposite principle by separating the 
colonial commands from those of the national 
troops, and by making the military forces within 
the colony subordinate to the civil power. It 
would seem that this arrangement might lead to 
great friction and inconvenience, should at any 
time the ministry of war and the colonial depart- 
ment disagree as to the policy to be followed. 
The principle of conscription, which the law of 
1893 attempted to apply in some of the colonies, 
was abandoned in 1900, and the colonial army was 
placed on the basis of volunteer enlistment with 
a three year service period. 1 The forces sta- 
tioned in Algeria and Tunis are a part of the 
French national army, and are not affected by the 
above legislation. 

In 1902 a consultative committee of colonial 
defense was instituted, which has worked out a 
general plan for the apportionment of the 54,000 
soldiers of the colonial army, outside of Tunis 
and Algeria, among the various colonies. The 
principles upon which the colonial military policy 
is to be based according to the recommendations 

1 There is no attempt at radical assimilation in this law, 
which is a good example of the present tendencies in French 
colonial legislation. 



of this committee are as follows: it is desirable 
to use troops drawn from the colony whenever 
possible, rather than contingents from the mother 
country, in order that the defensive autonomy 
of the colony may be developed ; effort should be 
concentrated upon the most important colonies 
while the others should simply be given the abso- 
lutely necessary means of defense, such as arms, 
ammunition, and a militia organization ; neighbor- 
ing colonies are to be united in groups so as to 
concentrate their forces and to use them, in the 
positions' where they will be most effective, 
whether employed in the defensive or offensive. 
In applying these principles the committee pro- 
posed : first, to give the French population in the 
colonies military instruction for the purpose of 
training the men for defense; secondly, to form 
five groups of colonies, each to be under the 
authority of a single commandant; thirdly, to 
reduce the garrisons in colonies which on account 
of their lack of importance or the natural diffi- 
culties which they oppose to invasion, are not 
exposed to dangerous attacks, but to reinforce the 
troops of Indo-China and to organize them as a 
division. The last point, together with the 
efforts that are being made to found a strong 
naval base in Indo-China indicate how general 
is the feeling among French colonial statesmen 
that Indo-China constitutes the most promis- 
ing colonial outpost of France, and how desirous 
they are to take an active hand in Chinese 
affairs. In accordance with the recommenda- 



tions of the committee, the French colonies have 
by law been divided into five groups, each of 
which is given a separate military establishment. 
This arrangement has very much increased the 
organic efficiency of the French colonial army. 
Together with the policy of constructing a series 
of strong naval bases, it forms a characteristic 
sign of the energy, understanding, and method 
with which the French are at present attacking 
the problems of their colonial policy. 

Methods of General Gallieni. The manner of 
establishing settled government without unduly 
antagonizing the natives, and the use of the army 
for the creation of large public works, have been 
raised to a science by General Gallieni, of Mada- 
gascar, whose system has attracted so much 
attention that it deserves more than passing men- 
tion. With respect to the pacification of new 
regions, General Gallieni lays down the principle 
that it should not be attempted to subjugate the 
native population by movements of strong col- 
umns of troops far from their original base. In 
a country whose population is hostile and whose 
physical characteristics are comparatively un- 
known to the invaders, such a policy cannot result 
in permanent peace and it will necessitate 
repeated conquests of the same region. General 
Gallieni therefore favors the policy of not con- 
quering more territory that can be fully pacified 
and permanently kept under control. For the 
purpose of pacification he divides the territory 
into circles which are under the absolute control 
26 401 


of a commandant. The circles are again sub- 
divided into sectors, under the command of a cap- 
tain or lieutenant. Each military officer tries 
within his sphere to establish friendly relations 
with the natives by studying their customs, 
acknowledging their native authorities, and mak- 
ing himself useful through the construction of 
public works. Should it become necessary to use 
force it must be made clear to the natives that 
the force is applied merely for the purpose of 
establishing order and good government; there- 
fore, after a village has been partially or wholly 
destroyed by the troops, the soldiers after the 
battle must assist in repairing the ruined build- 
ings. The natives who have submitted to the 
new government are given complete protection, 
because operations in any given area are not 
extended beyond the limit within which such pro- 
tection can be made effectual. 1 However, the 
words of General Gallieni will express his policy 
most clearly. In his instructions of May 20, 1898, 
he says: "Territory in front of us is not to be 
occupied until after we have completely organ- 
ized that which is to our rear; the natives who 
had not submitted the week before will aid us 
to-day, and will help us gain over the insurgents 
of to-morrow. We advance with a sure footing, 
and the last post occupied becomes an observa- 
tory, whence the commandant of a circle, a sector, 
or a district may examine the situation, may seek 
1 On account of the gradual extension of political control 
over a constantly widening circle, the system has been likened 
to an oil spot (tache d'huile). 



to enter into relations with the unknown elements 
which confront him and to utilize those which he 
has just subjected, and whence he may determine 
upon new points to occupy and prepare a fresh 
advance. This method never fails. It saves the 
country and the inhabitants and prepares them 
for being placed under our influence. It demands 
on the part of our officers many rare qualities: 
initiative, intelligence, activity, in order not to 
miss any occasion for gaining a foothold in coun- 
tries yet unknown and unsubjected; prudence 
calmness, and perspicacity, in order to avoid any 
set-back which would affect our prestige unfavor- 
ably and in order to know how to discern those 
elements which can be utilized in our progress. 
It is necessary to preserve the country and the 
inhabitants because they are des'tined to assist 
in our future enterprises of colonization and to be 
our principal agents and collaborators. When- 
ever the necessities of war oblige any of our colo- 
nial officers to act against a village or town, he 
must not lose from view that his first care, after 
the submission of the inhabitants, is to rebuild the 
village, to establish there immediately a market 
and a school. He must therefore avoid with the 
greatest possible care all useless destruction." 
The latter principle alone shows how absolutely 
different colonial warfare conducted upon rational 
principles will be from the ordinary warfare 
between hostile nations. In the latter case the 
prime object is to inflict as much injury as pos- 
sible and to weaken the opponent in every way. 



In colonial warfare the first care of the officers 
should be to impress the natives with the feeling 
that force is used only to bring about pacification 
and the establishment of order, and that there is 
no vicious desire to harm them or destroy their 

The second part of General Gallieni's program, 
the use of the colonial army for the purpose of 
introducing the works of civilization, though 
undoubtedly to be commended on account of its 
effect on the army itself, does not always produce 
the most favorable results in public works. For 
while the military organization contains much 
Ability and force that can be utilized for the eco- 
nomic advance of a colony, the methods insepar- 
able from it are not flexible and adaptive enough 
nor is the average military officer sufficiently 
practised in ordinary affairs and sufficiently ready 
to admit the occasional fallibility of military 
authority, to make such work always entirely 
satisfactory and successful. In Madagascar itself 
many undertakings were carried on by the mili- 
tary authorities which would have immediately 
impressed the engineering expert as a wasteful 
expenditure of energy such as the various works 
executed in and near Ambato, a place without 
economic resources or future. 

The German colonial army is entirely distinct 
from the imperial forces. It was given its organ- 
ization by imperial decree in 1898. In Kamerun 
and German East Africa the colonial army is com- 
posed of native soldiers officered by Europeans. 



In East Africa the Sudanese are admitted to 
minor positions of command. They form the 
most excellent troops on the East coast, though 
other tribes of East Africa who have more of 
negro blood in their veins are also being trained 
up into efficient soldiers. In Southwest Africa 
and in Kiaochau, on the other hand, white troops 
have been used almost entirely. Their use has, 
however, proved very expensive, and efforts are 
being made at the present time to enlist larger 
numbers of Chinese and of South African natives 
and thus to reduce the European contingent. 1 
The German colonial army, following the French 
example, is also employed in the construction of 
public works, such as roads, railways, and pub- 
lic buildings. 

The Congo Free State, the administration of 
which has specially engaged our attention in our 
discussion of public domains, has a public force 
of over 15,000 natives officered by Europeans. 
This force publique is, however, an army only in 
name, although it has a military organization. It 
is composed of natives who are nominally enlisted 
as volunteers but who are in effect forced to serve 
by the government. The term of service of the 
soldiers is four years in the regular army, and 
twelve years in the reserve. With admirable 
irony the administration of the Congo Free State 
keeps up the phraseology of anti-slavery. Men 

a The present long-continued and expensive war in South 
West Africa shows the difficulties which even the most effi- 
cient military organization may encounter in colonial up- 



who in the interior have been held in a mild form 
of domestic serfdom are "liberated" and placed in 
the army of the state. Here they are employed 
in exacting the payment of taxes and labor dues 
from the natives, and in putting down revolt. 
But the force publique is itself used for the heavi- 
est kind of work, such as carrier services and 
labor on the government plantations. The gov- 
ernment has not hesitated to admit to the ranks 
of its army the cannibals of the Upper Congo, 
who reinforce the work of their muskets by more 
primitive methods and spread what the govern- 
ment may consider a wholesome terror through- 
out the native population along the Congo. 

The Army in the Philippines. The United 
States so far has no specially organized colonial 
army. The history of the warfare In the Philip- 
pine Islands, although it redounds so favorably 
to the military qualities of the American soldiers, 
exhibits in a striking way the undesirable con- 
sequences of using in a colonial warfare a white 
army not specially trained or organized for that 
purpose. In the first place the cost of the cam- 
paign which in some years ran up to as high as 
$150,000,000, was so enormous that only a nation 
exceedingly rich and lavish in the employment 
of public funds could afford such an experiment ; 
but even the richest nation would hardly care to 
repeat it. The organization of the army, too, was 
not adapted sufficiently well to colonial warfare, 
while the methods of warfare were applicable 
rather to an international combat than to a colo- 



nial campaign. While ultimately successful 
from a strategetical point of view, they created a 
feeling of bitter hostility in the minds of the in- 

The method of expeditions by columns was 
used and frequently a region was subdued only 
to be evacuated again shortly after; the in- 
habitants who had been forced to accept the 
authority of the United States were thus left to 
the tender mercy of the insurgents. The policy 
of reconcentration was also employed ; not, to be 
sure, accompanied by all the cruel abuses that 
characterized the system in Cuba, but neverthe- 
less causing great distress and economic loss 
among the natives. Employment of native aux- 
iliaries was not considered until after the oppor- 
tunity of enlisting the Manila Civil Guard and the 
Philippine regiments drilled by the Spaniards 
had passed away. Then the United States troops 
allied themselves with the Macabebes, a most 
savage and cruel tribe, bitterly hated by the more 
peaceful natives upon whom they had long 

Later in the war, however, the American army 
began to adapt itself admirably to the special 
character of colonial campaigns of pacification; 
witness especially the road building on the island 
of Mindanao, where the Moro population was 
with great tact persuaded to take part in the 
work. 1 The native contingents in the army were 
gradually increased and various tribes were 

* The Atlantic Monthly. 92 : 818. 


drawn upon. The principle is now fully estab- 
lished that the Philippine army should consist 
very largely of native troops. In 1904 the 
strength of the army in the Philippines was 12,- 
ooo white troops, 5,000 native scouts associated 
with the army, and, in addition, a native constab- 
ulary of 6,900 men. The United States could not 
wish for better fighting material than the natives 
of the Philippine Islands who had already under 
Spanish rule been trained to the profession of 
arms with great success. The Chinese, too, 
might eventually be used in case of need to con- 
stitute a part of the military contingent, because 
wherever they come under European instruction, 
as they do in Kiaochau and in Hongkong, they 
make excellent soldiers and military policemen. 

After having considered the strength and 
organization of the various colonial armies, the 
question suggests itself as to how far military 
force should be employed for the subjugation of 
internal regions, for instance on the continent of 
Africa. The international law concerning the 
occupation of territory has determined that a 
claim of sovereignty over any region is invalid 
without the exercise of an effective control, mere 
symbolical occupation being insufficient. But 
the campaigns in the interior of Africa, 1 as well 
as the experience of the United States in the Phil- 
ippines and the colonial wars in Tongking, 
in Atchin, and in South West Africa, have amply 

1 The experience of the French in the region of Lake Tchad 
in Africa fully shows the risks and dangers of too active a 
forward policy in Africa. 



proved that an attempt to establish such control 
permanently and maintain it constantly by means 
of military conquest and occupation alone, would 
entail an expenditure too great to be borne by 
the colonies in question. Military force is nor- 
mally employed to break down original resistance 
or to suppress widespread insurrectionary move- 
ments, but unless this work of the army is sec- 
onded and in ordinary times entirely superseded 
by other agencies, colonial enterprise would soon 
have to be abandoned as too costly. More effec- 
tive methods of pacification are primarily the 
tactful management of native leaders with a full 
recognition of the organization of native societies, 
and the enlistment of native support and sym- 
pathy by the introduction of reforms plainly 
advantageous to the natives themselves. In this 
way British control was established in Nigeria 
and in the Malay Federated States, and it has 
proved far more effective than had it been based 
merely upon military conquest. 

Colonial Police. Another agency that ought 
to take the place of the army as soon as possible 
in the work of maintaining order is the colonial 
police. The functions of the colonial police differ 
materially from those of the army. The activity 
of the army is directed against insurrection, it 
meets force with force. The function of the 
police is preventive and protective. Through its 
secret service it seeks to keep in touch with all 
the movements of native opinion so as to be able 
to counteract any strong tendency toward fac- 



tionalism or insurrection. It thus anticipates 
what the army would ordinarily allow to ripen 
into an open rebellion to be put down by armed 

The organization of the colonial police presents 
many difficult problems. Where for any reason 
the government is not securely established or 
has ground to fear popular movements of opposi- 
tion, the secret service is of prime importance. 
Nowhere is this branch more perfectly organized 
than in the Indian Empire, where the operations 
of the survey are used to veil the activities of the 
secret police in the frontier regions and in dis- 
tricts liable to disorder. An important distinc- 
tion exists between military and civil police. 
The former is virtually an army with a firm mili- 
tary organization but placed under the direction 
of the civil authorities. Thus, the military 
police of Burma, recruited from natives of India 
and officered by Europeans, constitutes practi- 
cally an army of occupation with police functions 
directed by the civil government. The Philip- 
pine Constabulary is also a military police which 
is gradually superseding the army in the pacified 
regions, being assisted by troops only in case of 
wide-spread insurrection. This force was first 
organized under authority from the Commission 
by two officers who were both thoroughly 
familiar with the local conditions and with the 
Philippine people. The inspectors are appointed 
on the basis of competitive examinations; they 
should know the dialects of the Filipino tribes 



among whom their work is to be done ; the lower 
officers are natives. It was at first difficult to 
keep this police force from preying on the native 
populations, but by Act 691 of the Philippine 
Commission the discipline of the corps was so 
thoroughly established and it has been on the 
whole so strictly enforced that at the present 
time the abuses have decreased and the large area 
of pacified territory, about four-fifths of the Phil- 
ippine Islands, is kept under control by this force 
of 6,900 men, of whom the rank and file are all 
natives. Only a few times has the civil governor 
been obliged to call upon the commanding gen- 
eral to assist the police in establishing order in 
districts considered as pacified. 

As the military police is usually employed in 
countries that are not completely pacified, its 
members are ordinarily taken from localities dif- 
ferent from those in which they serve. Thus the 
Burma police are enlisted among the Sikhs and 
Gurkhas of India. In the African colonies the 
Hausas have been used as a military police in 
regions far distant from the seat of their race. 1 
The civil police, on the other hand, is usually 
recruited from the inhabitants of the locality 
itself, as it will be assisted in its work by its 
familiarity with special local conditions. In 
Oriental countries there usually exists a native 
village police, the use of which has been con- 
tinued in many of the European colonies. The 

x The Philippine Constabulary has, however, been recruited 
on the principle that a body of police should serve in a region 
with which it is familiar through long residence, 


Dutch have taken advantage of this institution 
in its original form; they do not pay the local 
watchmen and policemen who serve by rotation, 
and the police expenditure in the Dutch East 
Indies is therefore not heavy. In colonies where 
the Chinese are numerous, special police regula- 
tions are generally made and special police offi- 
cers appointed for their settlements. 

The employment of natives in the colonial 
police is made absolutely necessary by the great 
expensiveness of a European personnel. In 
India, where the police forces number 65,000,* 
the employment of Europeans would of course be 
entirely out of the question, and the same situa- 
tion exists in tropical colonies in general. It is, 
however, often very difficult to find among the 
native population satisfactory material for this 
service, as the natives are inclined to use their 
official power to take revenge upon their enemies 
for any former injury and to practise general 
extortion upon all who are not strong enough to 
resist them. In countries long accustomed to 
despotic and corrupt government a native official 
eagerly seizes the opportunity to act as a petty 
despot. Thus, the corruptness and tyranny of 
the native police in colonies has given the govern- 
ment no end of trouble. 2 The civil police force 

* This is exclusive of the military police and of the chauki- 
dars, a native rural police of uncertain efficiency. 

The cruelty and insolence of the native police of Sierra 
Leone contributed largely to the uprising of 1899 in that col- 
ony. The most efficient native police of Africa are the Hausas, 
being incorruptible, courageous, and fairly impartial, 


of British India bears a very bad reputation on 
the score of bribery and the trumping up of unjust 
charges against natives in the hope of extorting 
money. The British police inspectors have 
everything against them in their effort to establish 
honest methods in the police administration. 
Not only are the Indian populations accustomed 
to a despotic exercise of power but they even 
appear to see no unbearable grievance in that 
form of extortion which is so absolutely unen- 
durable to the European. The Indian police are 
poorly paid, receiving on the average about 170 
rupees a year. In the poverty of the Indian 
exchequer and the general supineness of the 
Indian people under local misgovernment are to 
be found the chief reasons for the persistence of 
the grave abuses in the Indian police system. 

When we ask ourselves by what means the 
abuses that so frequently occur on account of the 
employment of natives in the police service can be 
corrected, it is difficult to give a definite answer. 
As long as the police retains a military character, 
the administration may select its men from among 
the tribes which exhibit in a higher degree the 
virtues which we demand of the efficient guard- 
ian of order. But when the police becomes 
localized this recourse is no longer possible and 
it will require careful supervision, strict punish- 
ment of corruption, and intelligent instruction 
to make the native policeman realize the respon- 
sibility of his position. In this matter the colo- 
nial government should save no expense. The 



police should be educated, as they are in Egypt, 
to know the law under which they act, as well as 
the responsibilities and duties of their office. 
They should be carefully supervised and acts of 
extortion and cruelty should be punished with 
instant dismissal so as to impress the native mind 
strongly with the incompatibility of such prac- 
tices with a position of trust. But when we 
remember what conditions are possible in the 
police administration of civilized American cities, 
we will be forced to admit that long patience will 
be necessary in dealing with the police question 
among populations where the first ideas of civil- 
ized government and administration are still to 
be created. 



Sir DAVID CHALMERS' Report on the Insurrection in 
Sierra Leone. Parl. Papers. 1899, Vol. 60. Report of the 
Philippine Commission, 1902. I, 179. Ibid., 1903. Ill, 46. 
JENKS, J. W., Report on Oriental Colonies. Ch. 5. 
Deutsche Kolonial-Gesetzgebung. I, 330 ff . Koloniaal Ver- 
slag. 1902, 97-140. GALLIENI, Rapport d'ensemble sur 
Madagascar. I, 20-38. DOUMER, Situation de 1'Indo-Chine. 
68, 251. 


D'ANFREVILLE DE LA SALLE, A Madagascar. Paris, 1902. 
Ch. 5. CHARLES-ROUX, J., Les colonies franchises. Paris, 
1900. P. 79. CLOAREC, P., "La defense des colonies." 
L'Annee coloniale, 1901. DIANOUS, Legislation tunisienne. 
Ch. 8. DISLERE, P., Legislation coloniale. 230 sq. Fox 
BOURNE, H. R., Civilization in Congoland. Ch. 10. GAL- 
LUS, "Das deutsche Kolonialheer." B. e. K. I, 517. -GAL- 



LUS, "Die franzoesische Kolonialarmee." Ibid., II, 488. 
GIRAULT, A., Colonisation et legislation coloniale. Paris, 
1903. 607. GRENIER, P., L'armee coloniale. Paris, 1902. 
LANNESAN, J. L. DE, Principes de colonisation. Ch. 7 and 
10. LANNESAN, J. L. DE, La colonisation franchise en Indo- 
Chine. Ch. 2, 3. LOUTER, J. DE, Staats- en Administratief 
Recht. 522. MATHESON, Senator, "Australian Naval 
Defense." Proc. R. C. Inst. Vol. 34. -MAY, E. S., Imperial 
Defense. London, 1903. PETIT, E., Organisation des col- 
onies franchises. II, 125. PINON, R., "Bizerte." R. des 
D. M. Sept., 1902. ROBINSON, C. H., Nigeria, Our Latest 
Protectorate. Ch. 3. SCHWABE, K., Kriegfiihrung in den 
Kolonien. Berlin, 1903. SEAMAN, Major L. L., "Native 
Troops for our Colonial Possessions." N. A. R. Dec., 
1900.- THOMSON, H. C, Rhodesia and its Government 
Ch. 17. 



Abir Company, 347. 

Achour, 135. 

Acquisition, expense of, 82. 

Africa, 70; agriculture in, 288 
sq.i army, 296; character of 
natives, 384; currency in, 64, 
164, 1 80; experiment stations, 
280; export trade, 232; free 
trade zone, 105; cotton imports 
into, 321; Mohammedanism in, 
73 ; partition of, 5 ; river sys- 
tems, 259; sanitation in, 70; 
social life, 59. 

Agra, 127, 326. 

Agriculture, 276 sq. 

Agricultural credit, 325; loans, 
185 sq., 193, 195, 197, 199- 

Algeria, 55, 78, 86, 101, 145, 159, 
237, 2 59, 263, 332, 399; bank, 
191; budget, 156; commerce, 
244; concession policy, 338; 
forestry, 302; head tax, 139; 
individual property, 317; land 
laws, 316, 334; land tax, 135; 
loan, 157. 

Alligator societies, 78. 

American Economic Association, 
committee on colonial taxation, 

Arab influences in Africa, 61; 
slave raiding, 385. 

Argentina, 246. 

Army, 392 sq. 

Assam, 277, 366. 

Assuan dam, 298. 

Assimilation policy, 15, 20. 

Atchin War, 91, 408. 

Australia, 158, 215, 216. 

Banks and banking, 83 sq. 

Barbarous customs, 77. 

Benevolence theory, 6. 

Bengal, 117, 294. 

Bentinck, Lord, 250. 

Berlin, general act of 1885, 104, 

Bombay, 128, 308, 324. 

Bornu, 165. 

British Cotton Growing Associa- 
tion, 290. 

Brussels Conference of 1890, 74, 
105, 112; Sugar Conference, 
221; Supplementary Declara- 
tion, 106. 

Budget, colonial, 85. 

Buitenzorg, 276. 

Burma, 128; head tax, 137; mili- 
tary police, 410. 

Business taxes, 141. 

Cacao, 290. 

Caisse de la Dette, 149. 

Camphor monopoly, 122. 

Canada, 215, 216. 

Cantonment, 332. 

Cape to Cairo Railway, 261, 263, 


Capital in colonies, 184, 187. 
Capitation taxes, 137 sq. 
Caste organization, 12. 
Ceylon, 90, 99, 153, 164, 282, 291, 

301, 334, 342; agriculture, 278; 

commerce, 227; education, 54, 

55; tea, 222, 286. 
Chamberlain, Mr., 84, 213, 214, 

226, 383; on liquor legislation, 

China, 222. 



Chinese, 114, 1x9, 120, 374; 
coolies, 371. 

Civilization, the criterion, 8; dy- 
namic ^elements, 24; structural 
definition, 25. 

Coffee, 285. 

Colonial Bank, 195. 

Colonial Conference, 1902, 88. 

Colonial Loans Act, 1899, 153. 

Commerce, 69, 202 sq. 

Concession policy, 335 sq. 

Congo, 260; basin, 75, 104. 

Congo Free State, 83, 104, 207, 
265, 270, 302, 361, 369, 405; 
concessions, 343 sq.; forced 
labor, 379. 

Consumption taxes, 112 sq. 

Contingents, paid by French colo- 
nies, 90. 

Contract, freedom of, 16; labor, 
362 sq. 

Contributions, by colonies, 88. 

Coolies, 368. 

Corporal punishment, 364. 

Corvee, 376. 

Cotton, 299; cultivation, 290; 
duties in India, 97; exports, 
India, 221; imports into Africa, 
231; imports, Indo-China, 241; 
Manufacture, 307. 

Cotton, Sir Arthur, 296. 

Credit, bondage, 362 sq.; colonial, 
145, 185. 

Crown land, 332. 

Cuba, 285. 

Culture system, 283 sq. 

Currency, 163 sq.; in Africa, 64. 

Customs duties, 95 sq. 

Dacca, 309. 

Deccan, Relief Acts, 325. 

Dahomey, 235, 265, 270, 334. 

Darjiling, 277. 

Defense, 392 sq. 

Direct taxes, 123. 

Djibouti, 245, 268. 

Domestic slavery, 381. 

Doumer, M. Paul, 246, 342, 310. 


Douane, use of term, 102. 

Dutch culture system, 283 sq.; 


Dutch East Indies, 91. 
Dynamic elements in civilization, 


East Africa, 105, 125; British, 
229, 302; British, land system, 
352; business tax, 142; German, 
166, 292, 335, 361, 363; German, 
railways, 367. 

Economic basis, 27, 30, 71. 

Education, 17; Buddhist, 57; 
language of, 43; engineering, 
53; Indo-China, 43; literary, 49; 
manual training, 52; Moham- 
medan, 57. 

Egypt, 269, 397; banks, 197; edu- 
cation, 46, 49, 55; irrigation, 
297; land tax, 130 sq. 

Egyptian, finance, 147 sq.; Sudan, 


Emancipation of slaves, 66, 68. 
Ethical basis, 4. 
Example, force of, 36, 72, 157. 
Excise taxes, 113 sq. 
Experiment stations, 276 sq. 
Export duties, 95, 108 sq. 
Extensive cultivation, 10. 
Famine Commission, 252. 
Finance, 81 sq. 
Financial aid by mother country, 


Fiscal monopolies, 117 sq. 
Fiji, 328. 

Food production, India, 218 sq. 
Forced labor, 376. 
Forest law, 303. 
Forestry, 300. 
Formosa, 122. 

France, law of finance of 1900, 86. 
Free trade zone in Africa, 105. 
French Congo, 102, 104, HI, 125, 
142, 334, 367; concessions, 348. 


French Colonial, army, 398; 
banks, 187 sq,; commerce, 205, 
209, 236; customs tariff, 99; 
finance, 85. 

French West Africa, 156. 

French West Indies, no. 

Freight rates, 272. 

Fulbe, 61, 288, 384. 

Gallieni, Gen., 246; policy, 401 sq. 

Gambia, 334. 

Gambling in Java, 119. 

Ganges Canal, 294, 295. 

German colonial commerce, 205, 
246; finance, 86, 87; land sys- 
tem, 328, 351; cotton, 292; ex- 
port duties, in. 

Glen Grey Act, 359. 

Gold, exchange standard, 178; 
standard in India, 169. 

Gold Coast, 153, 235, 290, 328, 
359, 367, 385- 

Guadeloupe, 85, 188. 

Guarantee of loans, 145. 

Guinea, no, 269. 

Habous, 320. 

Hastings, Warren, 48. 

Hausas, 165, 389, 411. 

Hawaii, 288, 373; labor, 387. 

Hemp, 287. 

Hindus in Africa, 73. 

Homestead law, 354. 

Hongkong, 89, 90, 207, 220, 228; 

sugar industry, 305. 
Hospitals, 77. 
House slavery, 65. 
Humanitarian ideals, 3, 6. 
Hut taxes, 124 sq. 

Immigration protection, 370. 
Imperial, customs union, 213 sq.; 

Institute, 202, 281; Service 

Troops, 396. 

Imported contract labor, 368 sq. 
Income tax, India, 140. 
India, 92, 96, 206; agriculture, 

285; army, 395 sq.; art, 309; 

assimilation, 15; banks, 196; 
commerce, 218 sq.; cotton ex- 
ports, 221; criminal code, 78; 
currency, 164, 168 sq.; customs 
duties, 97; debt, 151 sq.; educa- 
tion, 17; educational system, 46, 
50; excises, 113; experiment 
stations, 277; export duty, 109; 
forestry, 300; import trade, 223; 
income tax, 140; irrigation, 293; 
labor emigration, 369; land sys- 
tem, 322 sq., 342; land revenue, 
12 1 ; legal system in, 16; indus- 
trial life, 307; military expendi- 
ture, 89; opium, 117; peasantry, 
325; police, 412; rural charges, 
129; salt tax, 113; tariff policy, 
226; transportation, 250; tea, 

Indigo, 222. 

Individual property in land, 328. 

Individualism, 18. 

Indo-China, 100, HI, 141, 238, 
377J agriculture, 279; army, 
400; bank, 190; commerce, 239 
sq.; currency, 173; education, 
48; fiscal monopolies, 120; 
forestry, 301; head tax, 137; 
industry, 310; land concessions, 
340; loans, 155; railways, 255. 

Industrial development, 303 sq. 

Intensive economy, 10. 

Ivory Coast, 270, 368. 

Irrigation, 292 sq.; Egypt, 150. 

Jamaica, 84, 99, 132, 153, 306; 
education, 51, 54, 55. 

Japan, 222 224, 307. 

Java, 83, 91, 96, 106, in, 171,273, 
276, 282, 301; bank, 198; cul- 
ture system, 283; education, 54; 
forestry, 300; head tax, 139; 
income tax, 141; labor con- 
tracts, 363 sq.; land system, 329, 
337; land tax, 132; opium mo- 
nopoly, 1 1 8. 

Johnston, Sir Harry, 291. 

Jute, 307. 



Kamerun, 165, 247, 270, 3*9, 335, 

35i 365* 404- 
Kano slave market, 65. 
Kasai Company, 344. 
Katanga Company, 344. 
Kew gardens, 281. 
Khartum, 268. 
Kiaochau, 87. 
Kingsley, Miss, 64. 
Kitchener, Lord, 398. 
Krumen, 384. 
Kwangchau-wan, 245. 

Lagos, 153, 235, 291, 328, 368, 

Labor, compulsory, 13; contracts, 

362 sq.; in Africa, 70; question, 

358 sq. 

Land policy, 314 sq.; revenue, 125. 
Language of instruction, 43. 
Latin races, 33. 
Lavigerie, Cardinal, 64. 
Law of liquidation, 149. 
Leroy-Beaulieu, M. Paul, 95. 
Liquor legislation, 74; tax, 75, 

112, 120. 

Literary education, 49. 
Loans, colonial, 144 sq. 
Lugard, Sir Frederick, 291. 

Madagascar, 100, HI, 138, 156, 

238, 241, 269, 273, 322, 351, 

372, 377. 4oi. 
Madras, 128, 293, 324. 
Madrasas, 48, 57. 
Makololo tribe, 63. 
Malaria, 76. 
Malay Federated States, 132, 273; 

excise, 114; export duties, 109; 

Malay race, 21. 
Manual training, 52. 
Maria Theresa dollar, 329. 
Mariana Islands, 329. 
Marshall Islands, 328. 
Martinique, 18, 74, 85, 100, 141, 

Mauritius, 90, 153, 164, 170, 220, 

305, 306. 

Mecca, 268. 

M&ayer system, 341, 387. 

Mexico, 363. 

Mexican dollar, 163, 171. 

Military police, 409 sq.; military 

contributions, 90. 
Mindanao, 407. 
Mining concessions, 355. 
Missionary education, 51. 
Missions and slavery, 67. 
Mohammedanism, 41, 42, 48, 54, 

57. 61, 73, 75, 289. 
Money lenders, 325, 327. 
Monopolies, fiscal, 117 sq. 
Morocco, 263. 
Mortgages, 326. 
Mysore, 301. 

Natal, 124. 

National ideals, 7. 

Native protection, 365. 

Negro psychology, 59. 

Negro race, 40, 44, 49; civilization 

of, 58; education of, 44., 
New Caledonia, rubber law, 302. 
New Guinea, 142, 361, 364. 
Niger, 260, 261, 265, 311. 
Nigeria, 75, 235, 265, 291, 355- 
Nile, 260, 263, 297. 
Nyangwe, 63. 

Octroi de mer, 95, 103. 
Officialdom, in French colonies, 

Opium, excise, 114; monopoly, 

117 sq. 

Ottavi railway, 261. 
Oudh, 127, 324. 

Pacific islands, 328. 
Pacte colonial. 311. 
Panjab, 127, 129, 294; Alienation 

of Land Act, 326. 
Parsee industry, 308. 
Peanuts, 290. 
Penal contracts, 364. 
Perideniya, 278. 
Permanent Settlement in Bengal, 

126, 323. 



Philippine Islands, 41, 45; agri- 
culture, 287; army, 406; busi- 
ness tax, 142; capitation tax, 
140; constabulary, 410; cur- 
rency, 175 sq.; education in, 
45* S3. 56; export duties, 109, 
m; internal revenue, 116, 143; 
land tax, 136; land system, 354; 
railways, 257; roads, 256; tariff, 
107 sq.; Torrens Act, 331. 

Philadelphia Commercial Museum, 

Police, 392 sq., 409. 

Porto Rico, business tax, 144; ex- 
cise, 115; general property tax, 
137; inheritance tax, 141; tariff, 

Portuguese, W. Africa, 380. 

Preferential trade, 100, 214. 

Public Domain, 332, 351, 344, 345. 

Race Mixture, 33. 

Raffles, Sir S., 133, 3*9- 

Railways, Africa, 259; Algeria, 
259; India, 250 sq.; Indo- 
China, 255; Philippine Islands, 

Reinwardt, 276. 

Religious feeling, 17, 31. 

Reunion, 189. 

Revenue farming, 114. 

Rhodesia, no, 264, 267, 269, 273, 
289, 356, 359, 397; police, 397. 

Rice, 240, 285, 286. 

River systems in Africa, 259. 

Roads, India, 250; Philippine Is- 
lands, 256. 

Rubber, 232, 301, 347. 

Rupee currency, 168. 

Russia, 308. 

Ryotwari tenure, 128, 324. 

Saharanpur Rules, 127. 

Salt tax, 113, 121. 

Samoa, 372. 

Sanitation, 28, 75;* in Africa, 70. 

Savings bank, 186. 

Scientific education, 34, 53. 

Seebpur, 277. 

Senegal, 141, 157, 242. 

Serfdom, 13. 

Shire Highlands railway, 267. 

Siam, currency, 173. 

Sierre Leone, 124, 234. 

Sikhs, 395, 396. 

Silver currency, 166, 171. 

Sind, 294- 

Slavery, 13, 30, 62, 381; and cur- 
rency, 180; domestic, 65. 

Slave trade, 63 sq. 

Sloyd system, 57. 

Snouck-Hurgronje, 22. 

Social entities, 22, 25. 

Somaliland, 245. 

South Africa, 85, 124, 367, 373; 
banks, 195; education, 51. 

South West Africa, 87, 142, 269. 

Stamp taxes, 116. 

Steamship subsidies, 236. 

Straits Settlements, 89, 90, 99, 
173, 228, 371; excise, 114. 

Spencer, Herbert, on general ed- 
ucation, 55. 

Subventions to French colonies, 

Sugar, 282, 284, 285, 287, 288; 
bounty system, 305; in India, 
220; industry, 304. 

Sumatra, 372. 

Surinam, 360. 

Syad Ahmed Khan, 48. 

Talukdars, 324. 

Tank irrigation, 293. 

Taxation, 92 sq.; and the labor 

question, 358 sq. 
Tea, 279, 282; in India, 222. 
Teak, 300. 
Thathemeda, 137. 
Thys, Col., 207. 
Tippu Tib, 63. 
Togo, 87, 142, 292, 381. 
Torrens system, 321, 322, 331. 
Transportation, 31, 249 sq. 
Trans-Saharian railway. 261 SQ. 
Transvaal, 138, 359, 373- 
Trinidad, 153. 
Tropical Africa, commerce, 230. 



Tropical agriculture, 281 sq.; med- 
icine, 76. 

Tuaregs, 61. 

Tunis, 102, 121, 157; commerce, 
244; head tax, 139; land sys- 
tem, 320; land tax, 136. 

Tzetze fly, 62. 

Uganda railway, 85, 268, 269, 297, 


Unoccupied lands, 333 sq. 
Usury, 325. 

Vagrancy laws, 359. 
Vincennes, 281. 
Wakefield, land policy, 337. 

West Africa, 359, 355; commerce, 
233 sq.; concessions, 350; cot- 
ton, 291; currency, 182; land 
law, 327. 

West Africa, French, 102, 322; 
commerce, 242; railways, 265. 

West Indies, 99, 165, 282, 305, 
306; commerce, 235; loans, 84. 

Yunnan, 120. 

Zambesi, 260. 

Zanzibar, 246, 381; slavery in, 66. 

Zemindari system, 126, 127, 296, 

Zenana mission, 77. 



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Miss Jane Addams has done a great work at Hull House ; but her 
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author of "Outlines of Economics, ".."Monopolies and Trusts," etc.